• FixCNBC.com
    Posted by on March 16th, 2009 at 4:52 pm

    The liberal group Media Matters for America has a new website up, fixcnbc.com, which is demanding changes at CNBC.

    You screwed up badly. Don’t apologize – fix it!
    CNBC should publicly declare that its new overriding mission will be responsible journalism that holds Wall Street accountable. As a down payment, we ask you to hire some new economic voices – people who have a track record of being right about the economic crisis and holding Wall Street executives’ feet to the fire.

    Oh boy. Neither CNBC nor Jim Cramer are responsible for the credit crisis. If you think they are, then you don’t understand the crisis.
    The idea that they need to hire “people who have a track record of being right about the economic crisis” is laughable. No economist predicted what happened because no economist could have predicted it. Some people got parts of it right, but were way off on many, many other aspects. And being right on one prediction doesn’t mean much about your next prediction.
    One more thing. You can only ask for a down payment if you own something and someone else wants to buy it. Ironically, it was people who didn’t understand the concept of a down payment that Media Matters should be upset with. They can blame themselves.

  • Guess How Many Building Permits Massachusetts Issued in January?
    Posted by on March 16th, 2009 at 4:28 pm

    One.

    The sharp downturn has ended a prolonged building boom that was fueled by easy credit and a strong housing market. Now, constraints on lending are preventing developers from getting money to start work. In January, one building permit was issued in Massachusetts for a residential complex with five or more units, according government housing data. Homeowners are also feeling the pinch, delaying renovations and other odd jobs that have helped sustain construction workers during previous downturns.

    Something tells me that despite less work, the government agency wasn’t downsized.
    (Via: Blodget).

  • Wells Fargo Chairman Calls Stress Test “Asinine”
    Posted by on March 16th, 2009 at 12:12 pm

    Richard Kovacevich, the Chairman of Wells Fargo has unkind words for the stress test:

    “We do stress tests all the time on all of our portfolios,” Kovacevich said. “We share those stress tests with our regulators. It is absolutely asinine that somebody would announce we’re going to do stress tests for banks and we’ll give you the answer in 12 weeks.”

  • Ben Bernanke on 60 Minutes
    Posted by on March 16th, 2009 at 10:34 am


  • Sesame Street on Ponzi Schemes
    Posted by on March 15th, 2009 at 6:19 pm


    (H/T: Barry.)

  • The Roubini Portfolio
    Posted by on March 14th, 2009 at 11:38 pm

    The FT uncovers Roubini’s investment strategy:

    Just ask Nouriel Roubini of New York University, who has a reputation as the most pessimistic economist in academe. He deserves it. His most recent paper, published last week, is entitled: “Can the Fed and Policy Makers Avoid a Systemic Financial Meltdown? Most Likely Not.”
    Nobody is more aware of the gravity of the financial situation, and nobody has done more to point out the risks of a systemic crisis.
    So how are Roubini’s own funds invested? They are 100 per cent in equities. In the long run stocks do best and he is not yet close to retirement, so he keeps putting more money into index funds each month.
    Fully aware of the gravity of the financial situation, he is also aware of the futility of trying to take action or to time the market. Those tempted to make the investing equivalent of a goalkeeper’s depairing dive should take note.

    Update: Felix went to the source and finds that Roubini’s 401k is in equities but he has substantial holdings of cash, plus his interest in his own firm.

  • Blaming the Victim
    Posted by on March 14th, 2009 at 9:45 pm

    Joe Nocera has a good article in the New York Times where he points out an unpleasant truth—many of Madoff’s victims should have known better.

    “These were people with a fair amount of money, and most of them sought no professional advice,” said Bruce C. Greenwald, who teaches value investing at the Graduate School of Business at Columbia University. “It’s like trying to do your own dentistry.” Mr. Hedges said, “It is a real lesson that people cannot abdicate personal responsibility when it comes to their personal finances.”
    And that’s the point. People did abdicate responsibility — and now, rather than face that fact, many of them are blaming the government for not, in effect, saving them from themselves. Indeed, what you discover when you talk to victims is that they harbor an anger toward the S.E.C. that is as deep or deeper than the anger they feel toward Mr. Madoff. There is a powerful sense that because the agency was asleep at the switch, they have been doubly victimized. And they want the government to do something about it.

    Also, don’t forget to blame Jim Cramer and CNBC.

  • A Short-Selling Conspiracy
    Posted by on March 14th, 2009 at 11:42 am

    A totally unhinged article from the Daily Kos:

    This rabbit hole involves the thugs surrounding Jim Cramer and some of the top financial “journalists” from the New York Times, WSJ, Fortune magazine and BusinessWeek, top hedge funds, the Mafia, and the DTCC. It also includes “blackmail, smear campaigns, espionage, fraud, harassment, extortion, bribery, rumor-mongering, sabotage, off-shore money laundering, political cronyism, frivolous lawsuits, witness tampering, biased financial research, false identities, bogus credit ratings, bribery, libelous blogs, bad science, forgery, wiretapping, counterfeiting, collusion, lying, cheating, threats and theft.”
    And if that wasn’t fun enough, it may be the underlying story of what collapsed the entire, global banking system or at least served as the catalyst for the collapse.

    What, no JFK assassination?

    Unfortunately, this story is so rich and multi-dimensional that I cannot possibly hope to do it justice here.

    Well, he’s right about that.

  • Mississippi Fred McDowell
    Posted by on March 13th, 2009 at 6:48 pm

  • My Last Post on Cramer Versus Stewart
    Posted by on March 13th, 2009 at 3:18 pm

    Jim Cramer went on Jon Stewart’s show last night. Frankly, I have no interest in watching it. I’ve grown sick and tired of Jon Stewart and his act. His reputation is a bubble and I hope someone takes it down. As usual, Megan sums up the issue nicely.
    I’ll add in a few points. Jim Cramer isn’t a reporter, he’s a stock-picker and he has an after-hours show on stock-picking. The beginning of the show clearly states what it is. I do the same thing, just for a much, much smaller audience.
    I don’t think there are many people who have criticized Cramer as long as I have, but he’s not responsible for predicting the house of cards that we built up. I don’t see why how Jon Stewart blames Cramer for this.
    The news isn’t the agency that’s supposed to prevent crime. Sometimes they do, but that’s not their role. In the Madoff case, the SEC failed us, not CNBC. It’s the job of CNBC to ask the SEC what went wrong and hold their bosses accountable. I don’t blame local muggings on the local news either.
    Finally, and most importantly, the credit crisis was by its nature extremely difficult to predict by anyone person, let alone a news organization. Let me state this carefully because this is a nice little lie that needs to end. Some people got parts of it right, like Roubini and housing. But no one could have gotten the whole thing right. If you think they could have, then you don’t understand what happened. For example, you would have had to have known that the government would come to the aid of Bear Stearns, but not to Lehman Brothers.
    CNBC does have very good reporters (Faber, Griffith, Herera, and many others). I didn’t even see what was wrong with some of the clips Stewart played in his original piece. Faber merely had an executive go on record. That’s exactly what he should have done. Of all the people to make fun of at CNBC, Stewart went after David Faber?
    Later on that same show, Stewart interviewed Joe Nocera, a very good report at the NYT. Ironically, Stewart could have used his exact same tactics against the Times to make it appear that they caused the mess we’re in. Andrew Ross Sorkin (a great reporter) said that the Feds wouldn’t let Lehman fail. Ben Stein says something absurd nearly every week. And Gretchen Morgenson…well, I’ll stop here.
    If you want a cheap laugh, fine, watch Jon Stewart. But don’t think he’s offering a serious critique of financial journalism.