Last week, Jon Stewart interviewed Jim Cramer and criticized CNBC, the biggest financial news network. Here is the link, there is an edited and unedited version. Unedited versions are always better. John Stewart tries to get to the point as to why CNBC is not doing a better job calling out faulty business practices that goes on within the financial services industry. Jim Cramer tries to stand up for what he has done but truly he has no real defense. At the end of the day, CNBC can not be objective for several reasons.
First, it always has to keep a positive spin on its reporting. If CNBC came out and said CEO’s are out here manipulating their books, hedge funds are manipulating markets and spreading rumors, it would cause widespread panic. In September of 2008, their were large runs on regional banks and ended with about 550 billion dollars being pulled out of money market funds. This almost collapsed the world financial systems as we know them today. However, these stories were never discussed on CNBC. Why? Because it would have caused more widespread panic. We obviously do not want disaster, so as a result, it is not talked about.
Secondly, It has to do 17 hours of live television a day while entertaining it’s viewers. If you had to talk about your favorite subject for 17 hours 5 days a week, you eventually find yourself making up stories, lying, and misleading people. There are millions of times when there is just nothing worth talking about in the markets, however CNBC has to talk about something, so very opinionated stories are created.
Lastly, CNBC ends each interview with what should I buy? Each news event does not have a money making opportunity attached to it. Actually, for investors there are really only about 2 times a year where you should be thinking about buying stocks and if it’s a bear market, your money should be in cash. You do not have to always have your money in the market. Buying and holding stocks should have never been a mantra believed by investors.
So, what I’m saying is do your own research and do not depend on what is said on television. It is not always factual. I hear many people saying I heard this on the news so it has to be true. That is not true at all. At the end of the day, make your analysis, and believe in your own research.