I’ve always found that a good laugh always brightens up the day. I used to watch re-runs of old Three Stooges shorts. I just love Moe, Larry, Curly, and even Shemp. Recently, I have found that I don’t have to watch the Three Stooges any more for comedic relief. All I have to do is turn on CNBC.

CNBC – Better Than the Three Stooges

It is humorous to see such dim-witted people presenting financial news to the public. A great example of this on CNBC is the perma-bull, Dennis Kneale. CNBC has made him a regular on their Power Lunch program. Why? Does CNBC have to meet some government-mandated quota to hire, in Stooges parlance, numbskulls? He has the financial and markets knowledge of a first grader. My apologies to all the first graders I’ve just insulted.

It is also great fun to watch so many clueless, so-called professionals who go on CNBC to speak to airhead hosts. I recall an interview several months ago that Melissa Francis had with a “money manager”. The money manager was praising financial stocks and attacking commodity stocks.

Melissa asked him about copper. He replied that he expected huge supplies of copper to be hitting the market soon. Why? Because everyone ‘knows’ that it only takes a few months to bring new mines on-line! Huh? A few months? Try 5-10 years. Of course, his statement went unchallenged by Melissa.

Why does CNBC insist on speaking to people about commodities and international markets who know nothing about them? The only experience Dennis Kneale has had with commodities is that block of iron ore which hit him on the head when he was a child.

CNBC should adopt a fairness policy. In order to have balanced coverage, they should speak to people who only trade commodities for a living when they need someone to discuss the future of Google or Apple or GE, etc.

Earthquake

The latest fairy tale authored by Wall Street and being spun on CNBC’s air is a doozy. Everyone is well aware of the massive economic earthquake hitting the US financial system. The earthquake is at least a 7 on the economic Richter scale. Fannie Mae and Freddie Mac are just the latest victims of that devastating earthquake.

A quick science lesson. When an earthquake strikes, the effects are most severely felt at the epicenter of the quake. The effects lessen the further away that you are from the epicenter of the quake.

Wall Street is attempting to turn that fact on its head and repeal the laws of physics. The Wall Street shills who go on CNBC’s air are telling investors that things aren’t so bad here and to ignore the fault line running through Wall Street. They tell individual investors to go ahead – it’s okay to start buying financial stocks.

Yet, in the same breath, these same shills tell individual investors to avoid anything related to commodities or economic growth in international markets. The shills say that things are much worse in China, Brazil, and everywhere else on the planet than in the US financial system.

Excuse me, Wall Street, but where did the financial problems start? Where has most of the damage and much of the write-offs occurred? I thought it was here in the US, not China. The alarm bells from my physics background go off in my head.

Let me see if I got this right – the US government adds possibly trillions of dollars of liabilities to its balance sheet from the bailout of Fannie Mae and Freddie Mac, more bailouts may be coming for the FDIC, auto companies, and many others. Yet that is supposed to bullish for US financial institutions and the US dollar? But some poor farmer in western China is going to be greatly affected by these events? What twisted logic! Sorry, but I’m not buying that load of manure that Wall Street is selling.

What a Fool Believes

“What a Fool Believes” is a song that was written by Michael McDonald and Kenny Loggins for the 1978 Doobie Brothers album, “Minute by Minute”. Maybe CNBC could play the song softly in the background as the Wall Street shills appear on air.

Many “professional” money managers have bought into the Wall Street fairy tale. Friday’s action notwithstanding, commodities along with foreign stock markets and currencies have gone in only one direction the past month or so – straight down.

This just shows that what we have on Wall Street is a herd of billion-dollar lemmings. No one thinks for themselves – it’s ’safe’ inside the herd. Just do what everyone else is doing and keep your job. It may be safe as far as keeping their cushy jobs, but it is not safe for people that have money invested with these fools.

That is why you always see money managers on CNBC compare their performance to a “benchmark”. When money managers appear on CNBC, they boast about how they beat the “benchmark” by a percent or two.

The “benchmark” only compares them to other fools. They neglect to tell investors the most important thing - whether they actually made any money. That doesn’t seem to matter. Making money for clients is secondary to “beating the benchmark”.

I strongly suspect that in the near future, these money managers will be forced to realize the folly of believing their own fairy tale. To quote from the lyrics of the Doobie Brothers’ “What a Fool Believes”, “Only to realize, It never really was.”

Regards,

Tony Daltorio
Special Situations Analyst, Oxbury Research