CNBC: The MSNBC Business Channel

06 November 2008

Obama Market Collapse: Day Two


Post-Election Fears Drive Worst Two-Day Drop In 21 Years

Once again, the
markets are panicked over an Obama presidency and instead of being honest about the cause, the MSNBC Business Channel is making excuses for their Dear Leader.

With the markets having just posted their worst two-day drop in 21 years, investors might expect some honest commentary from CNBC's anchors, but instead, Maria Bartiromo and friends actually wondered aloud what potential solutions to the crisis Obama might offer tomorrow.

How could anyone at NBC believe we are this stupid? What in the world does Obama know about the economy? Not a damn thing.

Only Art Cashin offered an honest take on the situation, saying early this morning from the trading floor that Obama's anti-free market, post-election rhetoric matched that on the campaign trail, unnerving investors.

On today's show, Rush Limbaugh referenced this:

RUSH: It was CNN. CNN Money said that there will be no recession and no depression now because Obama won -- and that took, what 24 hours? We predicted it. We predicted it right here on the EIB Network. Amazing, how the economy all of a sudden, "Oh, it's not that big a deal, not that big a problem." Well, it is. The Dow Jones Industrial Average down over 790 points since Obama won.

He hasn't even passed anything yet. The truth about this is, the markets work six to nine months ahead. Everybody in the market is trying to figure out where we're going to be six to nine months ahead. They're selling and they're getting out. That 4,000-point drop, that was also due to Obama. In fact, let's go sound bite number one before we get to Carl Cameron here. This was on CNBC this morning in the Squawk Box show and something they call The Bond Report. Andrew Sorkin from the New York Times, UBS Financial Services director Art Cashin spoke about the Obama transition. The New York Times guy says, "Why wasn't Obama's attitude toward Wall Street vs. Main Street already baked into the cake? I mean, there's an expectation Obama was going to win. There's an compensation he's talking about Main Street and Wall Street as though they're two separate things for a very, very long time."

CASHIN: It's one thing to be campaign rhetoric; you can understand that. Both of them were talking on a populist vein. But now we're getting in there; we're going to be talk about specific packages. I think the market said, "Holy smoke! The campaign's over and we're still talking like that, so what does that mean as far as opinions and ideology where it's going?" Nothing was baked into that cake.

RUSH: So basically here, the market sell-off is Obama fear-based. There's no question. I know some of the economic numbers continue to be bad, but CNN money says, "No, no, no. There's no recession. There's no depression! Everything's fine."

Apparently, traders expected
a new, magic, pro-business Obama to emerge after the votes were counted. Talk by Dems of eliminating retirement plans such the 401k has also spooked them.

Baking that cake is painful indeed, with 1000 additional Dow points subtracted after the pre-election declines caused by Barack's surging poll numbers.

At 5:07pm, CNBC Fast Money co-host Pete Najarian actually had the nerve to claim Obama's policies would not be based on "tax-and-spend" liberalism.

But CNBC is not alone: other media sources blamed the tanking markets on a number of economic factors that were factored into prices long ago. One particularly moronic point: that falling oil prices were contributing to the slide. Perhaps that's hitting oil companies, but it's helping the rest of the economy.

How do you even model equity valuations under a socialist administration? We've never been there before, nor did we believe it could ever occur in the US.

Amazingly, while Keith Olbermann's business network covers for Obama, even the Barack-friendly AP has begun to admit his policies are scaring the markets. From a report after yesterday's tumble:

Stocks plunge as investors ponder Obama presidency


NEW YORK (AP) — A case of post-election nerves has sent stocks plunging as investors, again anxious about a recession, are wondering what impact a Barack Obama presidency will have on business and the overall economy. Volatility has returned on Wall Street, with the Dow Jones industrials falling 486 points to the 9,139 level, and all the major indexes tumbling more than 5 percent.

The market was expected to give back some gains after a six-day runup that lifted the Standard & Poor's 500 index more than 18 percent. But investors lost some of their confidence about the economy and began dumping stocks again; light volume helped exaggerate the price swings, and there was more late-day selling by hedge funds.

Analysts said the market is also growing anxious about whom Obama selects as the next Treasury Secretary, as well as whom he picks for other Cabinet positions.

With Wall Street bracing for the worst from Obama's far-left policies, who knows where the bottom might be?

And yet, the same network which spread economic doom-and-gloom when there was a chance McCain might win the election, now has to cover for the fact that all of this was about Obama from the start.

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05 November 2008

Obama Victory Leads To Huge Sell-Off


Wall Street Not Prepared For Barack's Socialism


With CNBC following suit, the global mainstream media is doing a remarkable job covering for today's Obama-generated market collapse. As of 4pm, the Dow is down 490 points.

Instead of telling the truth, which is that Wall Street was holding out hope for an upset McCain victory, they're busy contending that Obama's victory "isn't enough" to overcome the "crumbling" economy.

Obama's socialistic policies are going to crush investors, which is why last week's huge market rally will soon become but a fond memory. With CNBC now serving as the MSNBC business channel, however, that's not an opinion you're going to hear.

In fact, CNBC even believes some sectors will fare well under Obama. Which are those, the ones he hasn't yet targeted for bankruptcy?

The International Herald Tribune, for example, believes Obama will actually cause markets to move higher in the long run:

European share prices tumbled, after a rally in Asia, as investors studied the implications of Barack Obama's election as America's 44th president.

"Obama's victory was no surprise," said Philippe Gijsels, senior equity strategist at Fortis Global Markets in Brussels. "The market will move on quickly from here."

Historically, Democratic presidents have been better for stocks than Republicans, he said, especially in their first 12 months in office, so the rally that has lifted shares recently could continue through the end of December and possibly into next year.

Nonetheless, it appears that stocks are in "a very big bear-market rally," Gijsels said, and "we're facing one of the worst global economic slowdowns we've ever seen. That's not political."

Only at the bottom of this story does CNBC mention in passing that Obama's policies might be trouble for the world economy:

"This is another, if I may use my term, 'fally', which is a rally based on fallacy … the rally of a new presidential election. Nothing is changed. The US economy is deteriorating day by day. There's no reason to rally right now," Kirby Daley, senior strategist at Newedge Group, told "Worldwide Exchange."

Obama still has to deal with a credit crunch which has not eased enough for banks to provide support to the real economy, despite three-month dollar Libor rates falling to a five-month low on Tuesday, Bob McKee, chief economist, Independent Strategy, said.

"We're getting contraction, we're getting deleveraging, and that's going to continue," McKee said. " We're going to have a really bad position for jobs, for the housing sector."

Both the new president and the new vice-president are urban people, and "that's where things are going to be sorted out", as they are much more in touch with urban issues, he added.

But Obama has been "ambiguous" on the question of free trade, and protectionist measures in the U.S. could be damaging for world growth, McKee said.

With CNBC serving as the MSNBC business channel, viewers simply can't trust its economic coverage, especially when the primary goal is defending Barack Obama's inexperience.

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29 October 2008

Huge Dow Surge Corresponds To Presidential Poll Shift, VW Short Squeeze


Reasons For Panic Buying Spree Not Hard To Find

Though you wouldn't know it from watching CNBC, there were two obvious reasons for today's mega-move and both speak volumes about the true state of our markets.

First, a massive short squeeze crushed hedge funds and other investors who had bet huge sums on a share price collapse at Volkswagen, only to see that wager go terribly wrong after Porsche announced it had upped its ownership stake to 74% of the company.

That left the big guns with few options for replacing borrowed shares, sending VW into the stratosphere.

The resulting carnage will probably be featured in economic textbooks for years to come. It was truly fascinating to watch.

But instead of recognizing the global impact of this situation, CNBC tried to argue it was irrelevant. In particular, David Faber even proclaimed that it had nothing to do with anything else in a global economic sense, seeing the short squeeze only as an isolated case of a bet gone bad.

Sadly, that narrow thought process missed the big picture: that on a slightly smaller scale, this could happen to just about any listed company right now. Share prices have been clobbered and short positions are currently massive.

It only takes one lit match to start a forest fire under these extremely dry conditions. In Germany, that's exactly what happened.

Wall Street's remaining players clearly realized even before the markets opened this morning that massive short squeezes could be coming to a trading floor near you. Most importantly, betting on a total economic collapse is a dangerous game, one which may soon bankrupt many supposedly savvy traders.

But even that alone didn't have our markets roaring this morning, as an early rally led to a midmorning sell-off, the kind we've seen countless times over the past year.

Something else had to trigger the kind of panic buying we saw in the afternoon and there's one obvious answer: polls showing previously-struggling John McCain closing the gap with cult leader Barack Obama.

Because the markets had priced in a doomsday scenario where Obama wins the election, any indications to the contrary could lead to a shocking market surge, exactly the kind we saw late in the day.

We heard little of this Tuesday on CNBC, which has sadly fallen into a new role as MSNBC's business channel, complete with far-left political agenda. Yes, Maria did interview McCain and Palin earlier in the day, but what I'm talking about here is an honest perspective on why the markets surged.

Thankfully, in an Op-Ed published in Wednesday's Wall Street Journal, we're treated to a perfect background assessment of what's been crushing the markets: Barack Hussein Obama, Nancy Pelosi and Harry Reid.

From George Newman's brilliant piece:

A lot has been said about the causes of the drastic drops -- and extreme volatility -- in stock prices and the impending recession. Blame has been heaped on low interest rates and dubious mortgage practices, and on the subsequent collapse of real-estate prices and the freeze in financial markets. But one other major factor has largely escaped attention.

To state the obvious: The valuation of an individual stock reflects the collective expectation of investors about a company's future profits, dividends and appreciation, and the same is true of the market as a whole. These profits, in turn, are greatly influenced by government policy on taxes, spending, subsidies, environmental and other regulations, labor laws, and the corporate legal climate. Investors have heard enough from both candidates in the last month or two to conclude that prospects for a flourishing, competitive, growing and reasonably free economy in a McCain administration are bad, and in an Obama administration far worse. (In fact, the market's bearish behavior over the last couple of months pretty closely tracks Barack Obama's gains.)

If you don't believe me, please answer a few questions:

- Have you thought of what a gradual doubling (and indexation) of the minimum wage, sailing through a veto-proof and filibuster-proof Congress, would do to inflation, unemployment and corporate profits? The market now has.

- Have you thought of how easily a Labor Department headed by a militant union boss would push through a "Transparency in Labor Relations" law that does away with secret ballots in strike votes, and what this would do to industrial peace? The market now has.

- Have you thought of how a Treasury Secretary George Soros would engineer the double taxation of the multinationals' world-wide profits, and what this would mean for investors (to say nothing of full-scale industrial flight from the U.S.)? The market now has.

- Have you thought of how an Attorney General Charles J. Ogletree would champion a trillion-dollar reparations-for-slavery project (whittled down, to be fair, to a mere $800-billion, over-10-years compromise), and what this would do to the economy? The market now has.

- Have you thought of what the virtual outlawing of arbitration -- exposing all industries to the fate of asbestos producers -- would do to corporate liability and legal bills? The market now has.

- Have you thought of how a Health and Human Services Secretary Hillary Clinton would fix drug prices (generously allowing 10% over the cost of raw materials), and what this would do to the financial health of the pharmaceutical industry (not to mention the nondiscovery of lifesaving drugs)? The market now has.

- Have you thought of a Secretary of the newly established Department of Equal Opportunity for Women mandating "comparable worth" pay practices for every company doing any business with government at any level -- where any residual gap between the average pay of men and women is an eo ipso violation? Have you thought about what this would do to administrative and legal costs, hiring practices, productivity and wage bills? The market now has.

- Have you thought of what confiscatory "windfall profits" taxes on oil companies would do to exploration, supply and prices? The market now has.

- Have you thought of how the nationalization of health insurance, the mandated coverage of ever more -- and more exotic -- risks, the forced reimbursement for excluded events, and the diminished freedom to match premium to risk would affect the insurance industry? The market now has.

Though Newman is also tough on McCain (there are many good reasons to do so), he makes it clear that Barack's the one driving this horrible sell-off. Any further indications that Obama might lose and we could have a runaway market rally, on a scale that will make Tuesday's gains look like child's play.

Remember that Wall Street's major players often have access to their own internal political data (for which they pay big bucks), so a politically-motivated market move this week may not always correspond to the polls we see on the news.

In the days before MSNBC's extremists took over NBC's news operations, CNBC could be counted on to report these developments honestly. Instead, it's now all about keeping Team Olbermann happy.

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28 October 2008

MSNBC, CNBC Credibility Reaches New Low


What's The Difference Between CNBC And MSNBC?

What's the difference between CNBC and ultra-leftist sister MSNBC? In recent months, surprisingly little, it seems.

For weeks, I've been trying to move beyond the mere gloom-and-doom nature of CNBC's economic coverage and get a handle on what it really is about their news presentation that has simply become unbearable.

Sure, CNBC's ratings have surged recently as panicked investors look for the latest news on collapsing stock markets around the world. We can't take that away from them.

And MSNBC is benefiting from a pre-election jump in viewers as interest in next Tuesday's contests reaches a fever pitch. They're even crowing about beating CNN fossil Larry King!

But can you really trust either channel at this point? For years, I certainly felt that CNBC was on our side, but no longer. During the bubble, they took heat for being too optimistic about the markets. Remember those days?

Now, CNBC truly is the GLOOM-AND-DOOM network, taking that formerly upbeat, pro-investor slant 180 degrees in the other direction. And MSNBC has moved so far to the left, it's enough to make Air America Radio blush.

One can watch CNBC all day and not get a realistic sense of why the markets are declining. Instead, its anchors rely on easy, uninsightful fallback points, such as "concerns about a global slowdown", without any real evidence pointing to that as the cause of the drop on Wall Street.

It's not just the lack of insight, however, that is damaging CNBC: there's a political agenda at work as well and that's where the ties to MSNBC become more apparent.

CNBC has become the gloom-and-doom network because that's the image of the economy NBC seeks to project going into next week's election. If CNBC had a long history of this kind of behavior, that would be one thing, but it doesn't.

This is actually about Obama's coronation by the mainstream media: a crappy economy means a victory for the Dear Leader.

Case in point: the odd sight of CNBC editor Charlie Gasparino providing a truly honest look at why the markets are really tanking: a panic over Obama's potential election. Did we see a lengthy discussion of this on the network?

No, it appeared in an October 15 Op-Ed he wrote for the New York Post, owned by rival media firm News Corporation:




Barack Obama has re mained cool and confident amid the financial melt down, even as John McCain at times has been embarrassing, lurching from one proposal to the next. But while the polls are reflecting Obama's steady hand, the markets haven't. In fact, they're getting worse by the day as Obama's lead widens.

Most investors know the devil is in the details - and the details of Obama's economic plans are anything but reassuring.

Of course, the market turmoil is first a reflection of grim reality - the bursting of the housing bubble and the billions upon billions in writedowns and losses that have forced upon the hugely leveraged financial firms companies that had cranked big profits during the bubble years.

The resulting credit crunch is hitting Main Street harder than ever before. The country is headed for recession; the only question is: Just how low can the markets and economy go?

It could be a lot lower - it all depends on the policies of the next president.

And, as it looks increasingly likely that Obama will be that man, the markets are casting a vote of "no confidence."

To be fair, McCain hardly instills confidence among the Wall Streeters I speak to. Why has his campaign spent the last week focusing on Obama's friendship with former terrorist William Ayers - when it should be hitting Obama's blind loyalty to policies that bring together the worst elements of Herbert Hoover and Jimmy Carter?

Recently, Obama said he wants to expedite loans to small businesses, so he seems to have a clue that they produce much of the country's job growth. Yet his income-tax hike on upper brackets will hit vast numbers of small businesses - they'd face the highest rates they've seen in decades.

Overall, his plan includes some of the most lethal tax increases imaginable, including a jump in the capital-gains rate. He'd expand government spending massively, with everything from new public-works projects to increases in foreign aid to a surge in Afghanistan - plus hand out a token $500 welfare check that he calls a tax cut to everyone else.

Where this should have been a frequent topic on CNBC in recent weeks, to be discussed in great detail, it has been mentioned only occasionally and often almost in passing.

Why? Because CNBC has simply become an extension of Keith Olbermann's MSNBC. Isn't it odd to think Gasparino must take his real views to the competition to have them properly aired?

How could NBC and GE allow CNBC's good name to be tarnished this way? Consider how liberals and conservatives alike are now ridiculing MSNBC's out-of-control antics:

Both sides of aisle rip MSNBC

Keith Olbermann also criticized at media luncheon

By Paul Bond - The Hollywood Reporter

Oct 27, 2008, 08:26 PM ET

In a room full of television industry executives, no one seemed inclined to defend MSNBC on Monday for what some were calling its lopsidedly liberal coverage of the presidential election.

The cable news channel is "completely out of control," said writer-producer Linda Bloodworth-Thomason, a self-proclaimed liberal Democrat.

She added that she would prefer a lunch date with right-leaning Fox News star Sean Hannity over left-leaning MSNBC star Keith Olbermann.

Olbermann was criticized by many who attended Monday's luncheon sponsored by the Caucus for Producers, Writers & Directors at the Beverly Hills Hotel. The event was dubbed "Hollywood, America and Election '08."

Bloodworth-Thomason and others seemed especially critical of the way MSNBC -- and other media -- has attacked Republican vice presidential candidate Sarah Palin while demeaning her supporters.

"We should stop the demonizing," she said, adding that Democrats have been worse than Republicans as far as personal attacks on candidates are concerned. "It diminishes us," she said of her fellow Democrats.

Bloodworth-Thomason even suggested a defense of Palin and her supporters should be written into TV programming, just as she went out of her way to portray Southern women as smart in her hit TV show "Designing Women."

Attendee Michael Reagan, the radio talk-show host and son of President Ronald Reagan, said he no longer will appear as a guest on MSNBC because "I actually get death threats."

With that kind of sentiment now cutting across party lines, why does CNBC choose to function as MSNBC's business channel?

Another case in point: on Wednesday, October 22, Wells Fargo chairman Dick Kovacevich was quoted as saying he felt any recession would be short and shallow. From the San Francisco Business Times:

Wells Fargo chairman sees recovery occurring faster than most expect

San Francisco Business Times - by Mark Calvey

Wells Fargo Chairman Dick Kovacevich said he expects governments around the world to do whatever is necessary to restore normal functioning of the global financial system.

“There may be doubts how long (the recovery) will take, but it will get done and sooner than most people think,” Kovacevich said in an address to the Commonwealth Club of California in San Francisco Tuesday night. “Governments will do whatever it takes to stabilize the financial system.”

The banker anticipates the nation will emerge from recession early next year.

He also took the opportunity to make a distinction between a financial crisis, such as the one now underway, and an economic crisis. He said today’s financial crisis doesn’t begin to compare with the economic crisis of the early 1980s when the prime rate peaked at 21.5 percent and inflation and unemployment were in double-digit territory.

Though this ran in business publications across the country and even found its way into Rush Limbaugh's monologue, I never saw it mentioned on CNBC. And believe me, given the almost shocking nature of this story, I was watching for it.

But the gloomsters wanted little, if anything to do with it.

In another key example, an October 20 Barron's cover story spelled out in close detail just why the economy wasn't nearly as bad as the media would have us believe:

Sorry, Chicken Little


It may feel as if the sky is falling, but things aren't as bad as they seem. Our saviors: cheap oil, strong exports and inventory rebuilding.

THESE ARE HARDLY THE BEST OF TIMES FOR THE U.S. ECONOMY. But they may not be as bad as you think. The credit crisis, stock-market crash and fall in home prices have raised legitimate fears of a nasty and protracted recession. Yet the economy has often proved more resilient than is commonly thought -- and constructive factors that have gotten scant attention should help the U.S. skirt a deep recession. In fact, it's possible that the downturn could prove to be one of the briefest and mildest on record.

The main positive is the huge boost to consumer spending that will come from the decline in energy costs. Although the run-up in oil, which punished consumers in the spring and summer, made front-page news, far less attention has been paid to the benefits of petroleum's recent slide.

The wide swing in both the percentage and sheer dollar magnitude of prices has been unprecedented. Over the past 14 months, the bellwether price of crude oil has made a stunning round trip, rising from around $70 a barrel in mid-August 2007 to $147 by mid-July, and falling below $70 Thursday. Natural gas has also slid about 50% from its early-July peak. If oil's price averages around $80, consumers will get a big dose of relief. Soaring energy costs had body-slammed them in July, August and September. Hence the dismal performance of retail sales over that stretch. But beginning with the current month, the energy payback will be enormous. This economic shock absorber should help offset the cruel blows of the credit crunch and declining wealth from equities and homes.

The cavalry hasn't exactly swept in to rescue the economy. But the energy benefit could keep a significant recession at bay until reinforcements -- particularly inventory rebuilding -- arrive early next year, and as credit starts to flow more freely.

That issue arrived on Saturday, October 18, but on the following Monday morning, I saw it referenced only once on CNBC: a quick question to Gloomster-In-Chief Art Cashin, who has never met a big sell-off he didn't love.

Without providing a single reason, Cashin dismissed the piece out-of-hand. That's despite the publication's strong reasoning and use of economic data.

From this point, it will be interesting to see how CNBC's coverage may change once the election is over. Should Obama become president-elect, will their mood suddenly shift in favor of the "short and shallow" recession scenario described by Wells Fargo's Kovacevich?

In the meantime, CNBC insiders should ask themselves why it's so important to follow MSNBC's dubious lead right into the political sewer.

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15 October 2008

Cable War Over Jim Cramer's Irresponsible Rantings


Rival Network Holds 'Mad Money' Host Accountable

Though their fledgling cable channel may not yet be available in every American household, a new marketing campaign by the Fox Business Network is generating a great deal of national press.

Calling attention to some of CNBC Mad Money host Jim Cramer's less- than- stellar recent recommendations, the ads are running on a frequent basis during CNBC's local cable spot breaks, in some cases several times an hour.

That contrasts with CNBC's own promos, which portray Cramer as some sort of god-like market fortune teller, splashing "In Cramer We Trust" across the screen after a confident image of the host himself.

It's not often that a television ad can generate this kind of attention, but we've already seen a blogospheric buzz over FOX's spot, as well as newspaper coverage, including the News Corp- owned New York Post:

The TV spots, which have been running in heavy rotation during CNBC's most-watched daytime hours, criticize the "Mad Money" host for his investment tips.

"The last thing you need is bad advice," the voiceover says. "The last thing you need is CNBC's Jim Cramer." The ad goes on to highlight a specific call Cramer made with regard to Wachovia, a failing bank that was forced to sell to Citigroup before Wells Fargo jumped in with a higher bid.

"On CNBC, Cramer said buy Wachovia and it tanked," the ad says.

Fox Business skirted CNBC's ad sales department by buying spots in local markets, including New York and Los Angeles, from cable operators such as Time Warner Cable and Comcast. (Fox Business is part of News Corp., which also owns The Post. )

"It is a predictably desperate attempt by a completely irrelevant network with ratings so pathetically small they refuse to make them public," said a CNBC spokesman. "As recent market events attest, Jim Cramer has proven once again to be one of the most insightful and knowledgeable commentators in business news today."

Fox Business, which just hit its one-year anniversary, has been taking shots at its much bigger rival since the start, but the Cramer ad is a more personal attack.

Yesterday, a Fox spokeswoman defended the ad, saying, "CNBC has become an industry joke thanks to Cramer's irresponsible, sloppy commentary and wildly inaccurate predictions - how many more times is he going to apologize for tanking CNBC's credibility?"

Always reckless even in the best of times, Cramer has in recent weeks been pouring gasoline on a raging fire every time he opens his mouth.

In the seemingly anarchist environment at CNBC, where anything goes as long as it's negative on our economic future, Cramer's rhetoric has clearly gone unchecked internally.

Ultimately, however, CNBC has to answer to its viewers and the recent ratings surge may actually prove damaging as longtime fans are burned by the station's wildly-negative positions on America's future.

Toning down some of Cramer's more irresponsible panic-inducing rants would be a great place to start if they wish to clean up their act.

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08 October 2008

CNBC Doom's Manifesto: Fight The Panic!


Despite Market Losses, World's Not Ending

Though not easy, it is possible to make a bullish case for the markets going forward. Here's a list that's hardly comprehensive, but does provide a starting point for discussion:

- The Volatility Index, known as the VIX, is registering historic levels of fear. Because the crowd is usually proven wrong, it's a contrarian indicator, meaning that a sky-high VIX could signal substantial rallies ahead. Heavy put buying is always a good sign that a market bottom is near.

- Unprecedented global economic cooperation should help us all. Wednesday's global rate cuts might not have led to a rally (yet), but they gave us the first fighting chance in some time.

- At some point, the market is going to run out of sellers, pure and simple. That's even the case with hedge fund redemptions, which seem to have caused some of the downturn to date.

- There are HUGE short positions out there. At any time, a short-squeeze rally could result from panicked traders who are suddenly forced to cover. That alone could cause a breathtakingly enormous rally, the likes of which we have never before seen. Have you ever seen the Dow UP 700 or 800 points in a single day?

One of these days, shorts will be wiped out in a matter of hours, if not minutes. It's like playing with matches in a dry field, the result could be wildfire. They've had it much too easy, but the party could soon be over.

- The Dow is down 1800 points in just over a week and hasn't had an up day in October. Can that really continue forever? Not bloody likely.

- The NASDAQ has been slaughtered not because of ANY company-specific news, but instead due to forced selling caused by hedge fund redemptions. That has led to stunning bargains in companies such as Intel, Cisco, Microsoft, Starbucks, Apple and even Google, not to mention hundreds of others. Do you really believe we will see these low prices last for long?

In fact, many traders are already taking advantage of these dips to buy Google, Apple, Cisco and other tech stocks.

- Markets have now more than baked in any global recession, even a fairly significant one. But what if firms outside of the banking and retail sectors aren't hit as hard as we've come to expect? We're assuming the worst, but we don't know whether that will be the true result.

- Wall Street has apparently assumed that the government bailout of the financial industry won't work or will take too long to implement. But what if it does have an impact?

- The Fed has undertaken an unprecedented wave of economic shock treatments for our financial system that in ordinary times would have us rallying to the moon. They've also signaled that they are prepared to take even bolder steps should they become necessary. At some point, prices will reflect this market-friendly reality.

It took very little
effort to come up with nine reasons to be positive about the market's future. What would you like to add? Please leave a comment below.

Together, we can fight the panic and return markets to normal levels.

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CNBC's Reaction To Global Rate Cuts Should Be Closely Watched


*** Updated With Trading Notes ***
*** Is Powerful Short-Covering Rally Possible? ***
*** 10:29-- Hey, Let's Have Guests Wear Obama Buttons! ***
*** Market Swings Now Comical ***
*** Hey Guys, Stop Trying To Analyse This Sell-Off ***
*** CNBC Still Debating "Capitulation"

One of the most irritating habits of CNBC anchors and analysts is their tendency to call for a federal policy change or some other action and then badmouth it once it actually occurs.

After days of clearly pushing for a coordinated global rate cut, the event itself (today's historic joint 50 basis point move) has so far not brought out the standard naysaying from CNBC's own staff, but the morning (or mourning) is still young.

Rick Santelli (seen in right photo) didn't hold back, however: at 8:39am, he said he wondered why futures ever moved higher on this announcement. Now that's a positive outlook! Could it have been the initial surge in European markets that boosted the figures?

What's truly shocking is that notorious inflation hawk Jean Claude Trichet of the European Central Bank actually went along with this, that's the real story here. From al-Reuters:

FRANKFURT, Oct 8 (Reuters) - The European Central Bank cut interest rates on Wednesday for the first time in more than five years as part of coordinated action with other major central banks to shore up the global economy.

The ECB cut its benchmark rate by 50 basis points to 3.75 percent, the first rate cut since June 2003 and sooner than analysts and markets had expected.

"The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability," the ECB said in a statement.

As of 9am, the futures are not holding up, pointing to another substantial sell-off. Which means, of course, that it's time to bring out Art Cashin and his 1000 reasons why the markets will never recover. Only a massive early sell-off on heavy volume will please Cashin.

There's no question that a massive sell-off after a global rate cut would be alarming, normally we should expect a substantial rally. That, of course, can't be blamed on CNBC.

But the markets have not yet opened, so one can hang on to a glimmer of hope. Eventually, the short-sellers will be proven wrong and the resulting rally will be every bit as strong as some of the recent sell-offs. The crowd can't be right forever.

9:39am: the market is attempting the first move into positive territory in days. Obviously, there will be a great deal of skepticism, but consider the potential power of a massive short-covering rally. The slingshot has been stretched so far backward that upward momentum could be breathtaking.

This time, it could be the shorts that are bankrupted!

10:30am: Swings in the Dow this morning would be comical if they weren't so violent. One moment, we're up over a hundred, then in a flash are down by the same, then back to zero. Program trading?

And what's with guests wearing Obama buttons on the air?

12:54pm: I'd love to see CNBC anchors stop trying to lay out rational "reasons" to justify these seemingly-endless declines. It's panic, pure and simple.

1:37pm: I'm tired of hearing CNBC talking heads complain that we can't go higher because of a lack of "capitulation" selling. How would we know it if we saw it? There's no clear definition of the term.

3:54pm: More whining about the lack of capitulation selling as the markets once again tank late in the day. Nothing like a big sell-off to get these guys excited and launching into "I told you so" lectures.

Add to that guests who are unwilling to call stocks cheap, even after an 1800 point drop in the Dow since last Monday, and CNBC has truly earned its Doom and Gloom reputation. We haven't had an up day in over a week, but the supposed "lack of panic selling" means we will keep going lower, according to the Gloomsters.

4:13pm: Meanwhile, they're bragging about a "CNBC effect" which is apparently cutting into retail sales, as nervous shoppers cut back after getting their daily dose of Gloom and Doom.

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07 October 2008

John Harwood Delivers Glum Assessment Of McCain's Prospects


Is John Harwood a graduate of the Olbermann School Of Broadcasting? During a political news update this morning on CNBC, the network political correspondent was adamant that John McCain's presidential prospects had all but vanished.

Citing poll data that has Obama taking a runaway lead, Harwood played the role of grim reaper for the McCain campaign. Oddly enough, CNBC doesn't appear to have posted the story, it's at MSNBC's site and is written by Mark Murray:

NASHVILLE, Tenn. - Fueled in part by the candidates' responses to the current economic crisis — as well as their performances at the first debates — Barack Obama has increased his national lead over John McCain, according to the latest NBC News/Wall Street Journal poll.

Obama is ahead of McCain by six points, 49-43 percent, which equals his biggest lead in this poll. Two weeks ago, the Democratic nominee held a two-point advantage over his Republican counterpart, 48-46 percent.

"Over the past couple of weeks, McCain has absorbed a very tough, one-two punch," says Republican pollster Neil Newhouse, who conducted this survey with Democrat Peter D. Hart. "First, the financial crisis... Second, the debates. These two things have clearly led to a momentum shift in this campaign, where Obama has slowly started to [increase] his lead."

With fewer than 30 days until Election Day, Hart adds, "I think John McCain finds himself in a hole no candidate wants to be in" — behind.

After delivering this gloomy assessment of McCain's supposedly hopeless campaign, Harwood found himself challenged by CNBC's Mark Haines, who wondered out loud what exactly it was that made Obama so strong on the economy.

How do we know that Wall Street's meltdown will hit McCain? The public is still in shock and there are many feelings yet to be sorted out. Yet NBC would have its viewers believe the race is already over.

By the way, CNBC's coverage of the presidential contest seems particularly important when one considers the idea that Wall Street is spooked by the thought of Obama winning the race. Could this be contributing to the stunning series of sell-offs we've seen to date?

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06 October 2008

Jim Cramer Spreads Panic On National Television


Also: CNBC Brings Out The Gloom-And-Doom Guests

Always known for his manic approach to financial talk hosting, CNBC Mad Money host Jim Cramer poured gasoline on the fire this morning with a panic-inducing plea to sell everything as soon as possible.

Were this to take place on CNBC, it might hurt the markets a bit, but Cramer compounded his error by spooking NBC's more mainstream and less market- savvy Today show viewers. Worse, it was then picked up by the Drudge Report, which has trumpeted this in the upper left corner above the main headline.


Jim Cramer: Time to get out of the stock market

Financial guru warns that investments could lose 20 percent of their value

By Michael Inbar contributor
updated 9:16 a.m. ET, Mon., Oct. 6, 2008

Bullish investors should turn into shrinking violets as the stock market continues its shocking downward spiral, CNBC’s “Mad Money” host Jim Cramer told Ann Curry on TODAY Monday.

In what Curry called a “dramatic statement,” Cramer emphatically urged any investor who has money they may need in the next five years tied to stocks to pull their dough out.

“I thought about this all weekend,” Cramer told Curry. “I do not want to say these things on TV.

“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”

While the animated Cramer is known for telling investors the best prospects for earning money on the stock market, he’s now saying retreat is the best position in the face of some of the worst financial news in decades. The bank lending default crisis that put financial firms around the country on the brink of collapse could bring “as much as a 20 percent decrease in the stock market,” Cramer predicted.

Aside from his irresponsible and frankly reckless, fire-in-a-crowded theatre rhetoric, could Cramer's end-of-the-world assessment prove contrarian for investors?

When the last bull has thrown in the towel, it's usually a good sign that the markets are close to bottoming. And when Jim Cramer is predicting years of declines, including a further 20% haircut, it could be the start of of a snapback rally.

Add to that a volitility index (VIX) now registering historic levels of fear, including heavy put buying and we now have several contrarian indicators converging all at once.

Can't make any promises, but this could prove to be the best news we've seen in some time.

ALSO: CNBC'S steady parade of late-afternoon guests and regular commentators tried their best to pour water on the "comeback rally" that the Dow close down "only" 369, rather than over 800 as seemed in the cards just an hour or two earlier.

My favorite was the conversation on the floor with Art Cashin, where disappointment was expressed over the supposed lack of capitulation, throw-in-the-towel selling, as though the rally had begun too soon.

Since when is a drop of 1400 Dow points in a week NOT ENOUGH SELLING? Sorry, but that was a washout.

Who says it can't go higher from here?

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CNBC Shoots Down Coordinated Fed Cut Possibility


If there's any lingering question about the need for this kind of site, it was put to rest a few minutes ago, as CNBC talking heads shot down the idea of any beneficial effect from a possible coordinated global rate cut led by Federal Reserve Chairman Ben Bernanke (below right).

Though Wall Street is demanding that Fed act immediately and cut rates by 50 basis points or more, NBC's financial network has already deemed this an exercise in futility. Backing up its on-air team this morning was a panel of experts there to reinforce the idea that nothing can save us from ruin.

No matter what the feds consider doing to shore up the markets, CNBC reporters/anchors/pundits (whatever you want to call them these days) believe it will fail to save the world's financial system from a full collapse.

Hey, they could be right, but the problem at CNBC these days is that economic gloom-and-doom has become the only market sentiment tolerated of anchors, guests and reporters. Optimism of any kind has no place on the network, the only viewpoint that carries weight is the promotion of economic armageddon.

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Bernanke image:

05 October 2008

Reader: 'Please Keep The Heat On CNBC'


From a reader
of this thoroughly fledgling site:

Great points regarding CNBC's off the charts gloom and doom reporting. Also it is certainly left of center. And totally left of center if not for Joe, Charlie and Larry.

The thing that drives me crazy is John Harwood's reporting. It always comes from the Democratic prospective. He is so far in the tank for Obama and the Democratic machine that it is over the top.

As you can tell, I'm a heavy viewer of CNBC but have been trying to move more to FBC. However, the pace of their program and the personalities are a little bit slower and need livening up. However CNBC's Liz Clayman is terrific and my preferred station when she is on.

Please keep the heat on CNBC. Maybe the problems are at the top because Zucker is an activist lib.

--- S Lewis

S, agreed on Harwood's reporting, it's outrageously tilted toward the Obama camp. He's become hard to endure and blurs any distinction between CNBC and MSNBC.

What do you think? Please leave a comment below.

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03 October 2008

Why CNBC: Gloom And Doom TV?


In the immortal
words of the late Admiral James Stockdale, "Who am I? Why am I here?"

That's a heck of a question, especially as yours truly considers even the thought of maintaining a third site. Both
The Radio Equalizer: Brian Maloney and SaveWRKO, a regional talk radio site for New England, have succeeded because they've filled blogospheric black holes.

While the latter site was created out of frustration with a Boston talk station's decision to hire a convicted felon to host its morning show, the
Radio Equalizer has built its following based on both opinionated commentaries and original investigative reporting. Both have been widely quoted in newspapers and on both cable and radio talk shows.

Your Radio Equalizer is actually one of the earliest CNBC fanatics, going back to the FNN days before it merged with the NBC upstart. Since the modern version of CNBC began in 1991, it has evolved considerably.

In the early years, only elitists with crude, brick-sized mobile phones owned stocks. Now, between individual portfolios and retirement plans, who doesn't? That cultural shift has brought the mainstreaming of CNBC and substantially larger audiences. With that, occasional controversies have emerged, including charges that it was too upbeat during the bubble of a decade ago.

More recently, however, CNBC has become the gloom-and-doom, economic armageddon network. Even minor rallies are questioned repeatedly, while there are always a thousand reasons to justify a major sell-off. It has become depressing to watch.

Guests with positive economic outlooks are rudely shouted down, as though they are merely trying to deceive viewers with sugar-coated assessments. And news anchors have become analysts, always quick to assert their views on the day's events.

While CNBC isn't yet as out-of-control as its sister station, MSNBC, in recent days it has come close. In no way is this site asserting that CNBC is directly responsible for our nation's economic crisis, yet there is a need to take a step back and analyze the tone recently taken.

At the moment, this site is truly half-baked. If it proves to have legs, there will be changes, such as a unique template (rather than the borrowed TRE design) and new name. Posting will be a bit more informal than Radio Equalizer readers have come to know, the idea is to bring examples to the site more quickly as they occur on-air. It could also be used to discuss stock-specific developments.

CNBC staffers are clearly working hard through this economic crisis and probably aren't especially interested in fresh criticism of their work. Some have even maintained a high degree of professionalism through this year's meltdown.

But that's what the Internet is all about, providing checks and balances to the mainstream media. This site is needed because it doesn't already exist out there somewhere else. But whether it continues will depend on your interest level.

For now, consider this: the world is NOT coming to an end, panic selling is NOT a good idea and anyone who underestimates the resilience of the American economy should expect to be proven wrong once again.

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