The Dow rallies. The Obama administration juices the rally. Jon Stewart thrashes Jim Cramer, as discussed below. Is anyone orchestrating these events? Blog comments I've seen charge that Stewart, a big time Obama supporter, went after Cramer on March 12 only because Cramer had assailed the Obama recovery program on March 9 and March 11.
Hmmm. Let's see. First, some background. The Dow has rallied sharply from its March 9 multi-year low of 6,547 to its March 13 close of 7,223. On March 2, with a sinking Dow closing at 6,726, President Obama made some cautiously bullish comments about investing. These struck one veteran observer as a risky case of presidential market timing. Indeed, they were widely seen as a buy sign. Still, the market continued to fall for a few days until hitting its multiyear low on March 9 and then beginning its "Spring rally", as CNBC fondly calls it.
Yesterday, on March 13, the Dow closed at 7,223 thanks in part to a rosy assessment of the economy from Obama adviser Lawrence H. Summers. It seems clear that the Obama administration, after months of saying "things will get worse before they get better," felt the need to change its tune and put a cap on fear itself. It's now playing a risky game of emotions focused on the stock market. (Summers, in his so-called "excess of fear" speech at the Brookings Institute, called for strong federal action in the Keynesian mold to break "the excess of fear" which he said follows market bubbles fueled by an "excess of greed [and] an absence of fear".)
So how might the Stewart/Cramer tussle fit in with all of this? Could it be that the seemingly defenseless Cramer simply threw the fight, a media-hyped event witnessed by 2.3 million viewers? Did Stewart notice that on the very next day, March 13, Cramer was back in the saddle doing precisely what Stewart charged him with doing: pumping up individuals to "Buy buy buy!" On Friday Cramer predicted that the Dow may hit Dow 8,000 - much as the Obama administration would love for him to do - but we're already half way there at 7,200 so even by Cramer's account this rally doesn't have that far to go. On Friday, Cramer also pretended, almost poetically - by alluding to his favorite fairy tales and TV sitcoms - that the dreaded evil short-selling hedge funds are motivated not by insights into financial realities but by sheer ill will alone. He even charged the shorts with being "anti-Ecclesiastes" (at 7:44 ) in wanting only a "time to kill" and never "a time to heal".
To bullish investors, Cramer's ebullience and the Dow's rally may feel good. But how will America feel if the Dow hits Cramer's target of 8,000? If the Dow can hold at this level, we'll all be happy. But if it collapses, as happens so often in bear markets, then Jim Cramer, wittingly or otherwise, and the Obama administration as well, will have used emotions to deliver hopeful investors and the market itself into the hands of Cramer's declared mortal enemies: the hedge fund shorts.
Stewart's mistake, in taking down Jim Cramer, was to zero in only on the man's past excesses. He never once sought Cramer's view on markets today - or his present bullishness.
Head fake? For my money, that's not the issue. Bottom line, it's a red herring, the wrong question to ask. So what's the right question? If the above thoughts make sense, they suggest that CNBC - America - could use better prime-time finance TV shows. Why don't we have them when we need them most? How ironic, some are complaining, that we have to look to Comedy Central for hard-hitting economic commentary. These folks are right. It's time for America to have financial programming that puts taxpayers, investors, financiers and politicians on the same page in resolving the financial crisis.
I'm working on that. In the next post, I'll identify issues that all Americans should be talking about. Can't wait? Browse the links on the left and you'll find plenty of them.