Posts filed under “Financial Press”
Its been exactly 6 months since the single dumbest newspaper column ever published appeared in The Washington Post. Breathtaking in its ignorance, shocking in its fallibility, astonishing in its author’s perversely misperceived world view, it stands as a monument to sheer cluelessness as an economic discipline.
It wasn’t merely off — its simply hard to find anything market or economic related in it that wasn’t 180 degrees wrong. It is a monument to why economists should never allow their politics to influence their day jobs.
I was otherwise occupied when this fetid pile of foolishness was published. Six months later, it reads even more ridiculously than it did on 9/14/08.
Let’s take a closer look at this, sentence by sentence, and see if we can find anything of value in it. (My comments are ALL CAPS AND BOLD)
“It was the worst of times, and it was the worst of times.”
I imagine that’s what Charles Dickens would conclude about the current condition of the U.S. economy, based on the relentless drumbeat of pessimism in the media and on the campaign trail. [THAT PESSIMISM WAS THE CORRECT CONCLUSION] In the past two months, this newspaper alone has written no fewer than nine times, in news stories, columns and op-eds, that key elements of the economy are the worst they’ve been “since the Great Depression.” That diagnosis has been applied twice to the housing “slump” and once to the housing “crisis,” to the “severe” decline in home prices, to the “spike” in mortgage foreclosures, to the “change” in the mortgage market and the “turmoil” in debt markets, and to the “crisis” or “meltdown” in financial markets. [THAT’S BECAUSE ALL THOSE SECTORS HAVE BEEN IN ENORMOUS SLUMPS]
It’s a virus — and it’s spreading. Do a Google News search for “since the Great Depression,” and you come up with more than 4,500 examples of the phrase’s use in just the past month. [HOW DOES THIS COMPARE TO OTHER PERIODS? IS THIS A LOT OR A LITTLE?]
But that doesn’t make any of it true. [BUT IT WAS & IS] Things today just aren’t that bad. [UNLESS YOU LOOK AT THE DATA; THEN ITS EVEN WORSE] Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. [JITTERS? ABOUT THE BIGGEST BANKRUPTCY IN AMERICAN HISTORY? NICE TIMING] And unemployment figures are up a bit, too. [A BIT? 4 MILLION JOBS LOST SINCE THE RECESSION BEGAN] None of this, however, is cause for depression — or exaggerated Depression comparisons. [WHY NOT?]
Overall, the pessimists are up against an insurmountable reality: In the last reported quarter, the U.S. economy grew at an annual rate of 3.3 percent, adjusted for inflation. [HOW’S THE REVISED GDP DATA?] That’s virtually the same as the 3.4 percent average growth rate since — yes — the Great Depression. [EVERYTHING IS FINE, NOTHING TO SEE HERE, MOVE ALONG]
Why, then, does the public appear to agree with the media? [BECAUSE THEY ARE SMARTER THAN YOU] A recent Zogby poll shows that 66 percent of likely voters believe that “the entire world is either now locked in a global economic recession or soon will be.” [AS WE HAVE LEARNED, A LOT SMARTER] Actually, that’s a major clue to what started this thought-contagion about everything being the worst it has been “since the Great Depression”: Politics. [THE FIRST THING YOU GOT RIGHT: YOUR POLITICS HAS BLINDED YOU TO REALITY]
Patient zero in this epidemic is the Democratic candidate for president. [ITS ALL HIS FAULT!] As it would be for any challenger, it’s in his interest to portray the incumbent party’s economic performance in the grimmest possible terms. [LIKE: “ARE YOU BETTER OFF NOW THAN YOU WERE 8 YEARS AGO?“] Barack Obama has frequently used the Depression exaggeration, including during a campaign speech in June, when he said that the “percentage of homes in foreclosure and late mortgage payments is the highest since the Great Depression.” [DAMN FACTS, HOW DARE HE] At best, this statement is a good guess. [NO, ITS ACCURATE DEPICTION OF DATA. DO YOU KNOW WHAT DATA IS?] To be really true, it would have to be heavily qualified with words such as “maybe” or “probably.” [HOW ABOUT 2 MILLION PLUS FORECLOSURES AND RISING?] According to economist David C. Wheelock of the Federal Reserve Bank of St. Louis, who has studied the history of mortgage markets for the Fed, “there are no consistent data on foreclosure or delinquency going all the way back to the Depression.” [YOU ARE GOING WITH “WE DONT HAVE FORECLOSURE DATA GOING BACK THAT FAR?” REALLY?]
Rob writes in to say:
There has been a wee bit of a dispute going on between CNBC’s Jim Cramer and Jon Stewart of The Comedy Channel. Sort of like there was a mild difference of opinion between the Allies and the Nazis. Or perhaps like that time that Ali and Frazier got together for a light workout.
Well, tonight on The Daily Show, Cramer will be Stewart’s guest. That should prove to be rather interesting.
Here are some clips of the matter up to this point. By the way, whether you agree with Cramer or whether you agree with Stewart, this is pretty funny stuff.
Jon Stewart’s original bashing of Cramer/CNBC and his follow-ups after Cramer began talking about it on the air. (Note – it takes a while to view the videos, but its not like we’re busy making money or doing work anyway these days):
1) March 4, 2009: CNBC Gives Financial Advice
2) March 6, 2009 Some Liquid Sunshine: An “intervention” by Stephen Colbert (also of The Comedy Channel)
3) Monday, 9 Mar 2009 Cramer’s retort and explanation:
4) March 9, 2009: In Cramer We Trust
5) March 10, 2009: Basic Cable Personality Clash Skirmish ’09
Final clash of the titans this evening at 11pm . . .
Terribly amusing posting on the Freakonomics blog yesterday that made me check if it was April Fool’s Day: > > Thanks for the compliment — I think we both know this was correlation rather than causation. We recorded that on Monday afternoon, and they posted it early Tuesday. But if you looked at the US…Read More
Hey, Lama, hey, how about a little something, you know, for the effort, you know. * -Carl Spackler > I should take it as complement when not one but two TBP posts show up on the front page of the NYT on consecutive days. Some of this is clearly a moment of zeitgeist, with more…Read More
The incessant parade of bad advice, partisan quackery and general ignorance about the way markets work is fascinating to watch. I used to find it annoying, but now I simply use it as a way to make money. Just find the dumbest of the group, and take the other side of their trades. The latest…Read More
> On Saturday night, I referenced an interesting accusation from Playboy against CNBC: They claimed that the now infamous Santelli rant was a plant. (Rick Santelli’s Planted Rant ?) As I noted then: I have no insight as to whether this is true or not — but it certainly deserves a serious response from both…Read More
I was interviewed by several journalists last week about Rick Santelli’s Rant — my exact quote was it had a “Faux” feel to it. (I haven’t seen it in print yet)
What was so odd about this was that Santelli is usually on the ball; we usually agree more often than we disagree. He’s been responsible for some of the best moments on Squawk Box.
But his rant somehow felt wrong. After we’ve pissed through over $7 trillion dollars in Federal bailouts to banks, brokers, automakers, insurers, etc., this was a pittance, the least offensive of all the vast sums of wasted money spent on “losers” to use Santelli’s phrase. It seemed like a whole lot of noise over “just” $75 billion, or 1% of the rest of the total ne’er-do-well bailout monies.
It turns out that there may be more to the story then originally met the eye, according to (yes, really) Playboy magazine.
“How did a minor-league TV figure, whose contract with CNBC is due this summer, get so quickly launched into a nationwide rightwing blog sensation? Why were there so many sites and organizations online and live within minutes or hours after his rant, leading to a nationwide protest just a week after his rant?
What hasn’t been reported until now is evidence linking Santelli’s “tea party” rant with some very familiar names in the Republican rightwing machine, from PR operatives who specialize in imitation-grassroots PR campaigns (called “astroturfing”) to bigwig politicians and notorious billionaire funders. As veteran Russia reporters, both of us spent years watching the Kremlin use fake grassroots movements to influence and control the political landscape. To us, the uncanny speed and direction the movement took and the players involved in promoting it had a strangely forced quality to it. If it seemed scripted, that’s because it was.
What we discovered is that Santelli’s “rant” was not at all spontaneous as his alleged fans claim, but rather it was a carefully-planned trigger for the anti-Obama campaign. In PR terms, his February 19th call for a “Chicago Tea Party” was the launch event of a carefully organized and sophisticated PR campaign, one in which Santelli served as a frontman, using the CNBC airwaves for publicity, for the some of the craziest and sleaziest rightwing oligarch clans this country has ever produced. Namely, the Koch family, the multibilllionaire owners of the largest private corporation in America, and funders of scores of rightwing thinktanks and advocacy groups, from the Cato Institute and Reason Magazine to FreedomWorks. The scion of the Koch family, Fred Koch, was a co-founder of the notorious extremist-rightwing John Birch Society.”
What is Playboy’s evidence of this?
“Within hours of Santelli’s rant, a website called ChicagoTeaParty.com sprang to life. Essentially inactive until that day, it now featured a YouTube video of Santelli’s “tea party” rant and billed itself as the official home of the Chicago Tea Party. The domain was registered in August, 2008 by Zack Christenson, a dweeby Twitter Republican and producer for a popular Chicago rightwing radio host Milt Rosenberg—a familiar name to Obama campaign people. Last August, Rosenberg, who looks like Martin Short’s Irving Cohen character, caused an outcry when he interviewed Stanley Kurtz, the conservative writer who first “exposed” a personal link between Obama and former Weather Undergound leader Bill Ayers. As a result of Rosenberg’s radio interview, the Ayers story was given a major push through the Republican media echo chamber, culminating in Sarah Palin’s accusation that Obama was “palling around with terrorists.” That Rosenberg’s producer owns the “chicagoteaparty.com” site is already weird—but what’s even stranger is that he first bought the domain last August, right around the time of Rosenburg’s launch of the “Obama is a terrorist” campaign. It’s as if they held this “Chicago tea party” campaign in reserve, like a sleeper-site. Which is exactly what it was.
This looks like more than a coincidence. This is now a very serious charge.
I have no insight as to whether this is true or not — but it certainly deserves a serious response from both Santelli and CNBC. If its false, then they should say so, and demand an apology from Playboy.
But if any of it is true, well then, Santelli may have to fall on his sword, and CNBC may owe the public an apology.
I am VERY curious if there is any truth to this.
UPDATE: March 1, 2009 5:43am
Wow, talk about link bait — that was a boatload of comments on a Saturday nite! Doesn’t anyone go out anymore? It must really be a recession . . .
UPDATE 2: March 1, 2009 7:45am
Steve at the Daily Bail writes:
I publish and write the Daily Bail. I have posted a response to the allegations by Playboy magazine made against our site. I am writing you personally so that you know their allegations about me are categorically untrue. It’s unfortunate because I believe that the article did some great investigative work and then at the end they threw me under the bus for no apparent reason. Apparently, the authors just assumed we were part of this conspiracy because of my own personal excitement about the prospect of a mid-summer tea party. They never bothered to contact me for explanation or comment of any sort.
My response to their article is here. Please read it so you know just how wrong they were about me and my politics.
Santelli vs Cramer (January 2008)
Rick Santelli Strikes Again (September 2008)
Backstabber: Is Rick Santelli High On Koch?
Mark Ames and Yasha Levine
Playboy, 02.27.09 1:40 PM CST
David Reilly is Bloomberg’s new king of snark. His column this morning is another example of why media outlets should hire knowledgeable and opinionated experts and let them have their say. FT has this down to a science. I first noticed this with Michael Lewis, then Caroline Baum, and now Reilly. Its heartening to see…Read More