“What it feels like to us, and I’m speaking purely as a laymen, it feels like we are capitalizing your adventure…”
—Jon Stewart to Jim Cramer, March 12, 2009
Thus Jon Stewart drove a stake in the heart of what many serious investors refer to as “BubbleVision”, when he dismantled “Mad Money” host Jim Cramer—and, by inference, CNBC—piece by piece during last week’s now-famous Daily Show interview.
So famous, in fact, that NBC Chief Jeff Zucker felt compelled this week to dismiss Stewart’s interview as “absurd” and “completely out of line.”
But it is far from absurd and anything but out of line. We think it’s about time somebody called CNBC out for the mindless cheerleader it has become.
Still, if you haven’t seen the interview for yourself, spend the twenty minutes to watch the replay, and see what you think.
We think it’s an eye-opener.
For one thing, Stewart demonstrates that, when he is not making yuks with his peers in the entertainment world who use the show to flog forgettable movies and even worse TV shows, he can be the best interviewer on television, bar none.
In less than half the air time of one “Mad Money”, Stewart picks apart Cramer’s show through the kind of logical, well thought-out, relentlessly piercing, hypocrisy-baring interview that “Sixty Minutes” is famous for but hasn’t conducted since Nixon was in the White House.
For another thing, it is Cramer, and not some lesser CNBC light, getting drilled here. You’d think he’d do better.
After all, Cramer actually ran a hedge fund and made money for his investors before getting into the entertainment side of the financial world. Furthermore, he wrote what we have long considered one of the best financial books ever written—certainly the best look at what it’s like to actually be on the inside of a hedge fund (“Confessions of a Street Addict.”)
If anybody could handle a Jon Stewart, you’d think it would be a Jim Cramer. Yet he barely says a complete sentence, let alone makes a coherent point, during the entire interview.
In fact, far from landing a punch, Cramer says ‘no mas’ in a figurative sense by offering—and we are not making this up—to change his style completely.
Now, to be fair, Stewart seems to have actually prepared for the interview. He knows where he’s going, right from the start.
Not so Cramer, who strides onto the Daily Show set fresh off a Martha Stewart pie-making segment, with his shirt-sleeves rolled up and a smile on his face, and a game-plan that seems no deeper than to a) appear contrite, b) speak softly, and c) smile a lot. None of which come naturally to the man, as long time viewers know.
“Big fan of the show,” Cramer tells Stewart at the start, after taking his seat at the Daily Show desk. “But who doesn’t say that?”
“A lot of people, actually,” Stewart shoots back, under his breath, getting a laugh while simultaneously putting himself firmly in the driver’s seat, Alpha-Male-wise.
Stewart then ingeniously sets up his guest by leaning towards Cramer and offering what sounds like an apology: “This was not directed at you per se,” Stewart says, of the relentlessly scathing portrayals of Cramer on his previous shows. “I just wanna let you know that.”
No, and D-Day was not directed at Hitler, per se.
Cramer, however, takes the bait: he smiles, shrugs, and lets his defenses down. This will be his first mistake, his second mistake, and his third, too, for it allows Stewart to then lay out the central premise of what he perceives to be CNBC’s main problem, without any rebuttal from Cramer.
The problem with CNBC, Stewart says, is “The gap between what CNBC advertises itself and what it is.”
To make his point he shows an “In Cramer We Trust” promotional clip for Mad Money, with an authoritative, God-like voice intoning:
“When you don’t know what to do, don’t panic. You’ve got Cramer at your back.”
“Look,” Stewart says, letting the farcical nature of that statement sink in to Stewart’s audience and Cramer as well—after all, most of Cramer’s boo-yah types probably lost as much of their 401ks as everyone else in America—“We’re both snake oil salesmen to a certain extent, but we do label the show here as ‘snake oil,’…isn’t there a problem selling snake oil as vitamin tonic?”
“We all should have seen it more,” Cramer says contritely. “I don’t think anyone should be spared in this environment.” He concludes with a shrug. “We’ve made some mistakes…we’ve got 17 hours of live TV to do— ”
“Maybe you could cut down on that,” Stewart says quietly, stopping Cramer in his tracks and bringing down the house.
The Lightening Round this is not.
With Cramer momentarily speechless, Stewart moves in for the kill, calling up clips of Cramer’s infamous 2006 Street.com interview in which Cramer discusses, in very plain language, how to manipulate markets:
“You know a lot of times when I was short,” Cramer says on the video, “I would create a level of activity beforehand that could drive the futures, it doesn’t take much money….”
“What does that mean?” Stewart asks when the clip ends.
Cramer, shoulders hunched, tight smile on his face, says, “Okay, this is a hyperbolic example…I didn’t do this, I’m trying to explain this—”
Steward interrupts: “It sounded like you did do that.”
“Well I was inarticulate,” Cramer responds, inarticulately. “I barely traded the futures.”
Stewart says nothing to Cramer, but quickly calls for the next video clip from that same interview. It shows Cramer putting on his most egomaniacal face and sniffing to the interviewer,
“I would encourage anyone who’s in the hedge fund business to do it because it is legal, and it is a very quick way to make money, and very satisfying. By the way, no one else in the world would admit this, but I could care.”
Stewart lets the arrogance sink in, then says, “I want the Jim Cramer on CNBC to protect me from that Jim Cramer.”
And he’s still not even halfway through the interview.
What else could Cramer have done, you might ask?
Well, for starters he could have pointed out that the show is called “Mad Money” and not “How to Secure Your Financial Situation for Life.”
He could have pointed out that the show grew out of a radio program in which small investors called in questions; that he began to get a tremendous response from investors who wanted to take more control of their finances; and things took off from there.
He could have pointed out that his show was simply feeding a market that already existed, not forcing something down people’s throats.
He could have pointed out that the whole idea of a TV show called “Mad Money” was exactly that: a fun way to help investors make some “Mad Money” in stocks. Not to uncover fraud at Fannie Mae or AIG or Lehman Brothers.
He could have pointed out that, being an ex-hedge fund guy, he was helping educate his viewers as to what actually makes stocks move, what to look for when trying to evaluate companies in different industries, and how to do their own homework on those companies.
Cramer could have said right up front that he never pretended to be Suze Orman or Ralph Nader, for that matter: that he simply tried to make the stock market understandable and maybe even fun, before he and his bull-market pals got blind-sided by the worst stock market since 1937.
But he did not. Cramer never had a plan.
Besides, Stewart’s larger criticism of CNBC is right on target, and hard to rebut:
“You talk about the regulators, why not the financial news networks?” Stewart says, summing up his main beef. “That’s the whole point of this. CNBC could be an incredibly powerful tool of illumination for people that [sic] believe that there are two markets—one that has been sold to us as long term, put your money in 401ks…then there’s this other market, this real market…and it hurts that long term market. … What it feels like to us, and I’m speaking purely as a laymen, it feels like we are capitalizing your adventure… It is a game you know is going on, but that you go on television as a financial network and pretend isn’t happening.”
Stewart is right: CNBC could be a powerful tool of illumination, rather than a testosterone-charged reflection of The Market itself.
And Cramer, who lately seems hell-bent on blaming the financial crisis on a laughably delusional ‘conspiracy’ among naked short-sellers, which simply does not exist, rather than five solid years of really really really bad lending practices by AIG, Countrywide Credit, Citigroup, Fannie Mae, Freddie Mac, Merrill, Lehman, Wachovia, and, oh, yes, GE, which happens to be the parent company of CNBC, has no response to it.
Instead, he simply gives in.
“How about if I try it?” Cramer blurts out, half way through the interview.
Stewart looks taken aback momentarily, while his guest, a man who normally dismisses his critics by ripping heads off of plastic bears and punching the cry-baby button, offers to throw out the manic-depressive Mad Money Playbook and adopt the Jon Stewart Illumination Model.
“I’ll try it. I’ll try it,” Cramer insists.
Boo-yah! will never be the same.
Jeff Matthews
I Am Not Making This Up
© 2009 NotMakingThisUp, LLC
The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.