Foreign Policy magazine, revamped and now owned by The Washington Post, issued its "Ten Worst Predictions for 2008."
Here's #2 on this booby prize list: A good clobbering administered to CNBC host Jim Cramer. First the offending prediction, and then FP's comment.
“Peter writes: ‘Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?’ No! No! No! Bear Stearns is fine! Do not take your money out. … Bear Stearns is not in trouble. I mean, if anything they’re more likely to be taken over. Don’t move your money from Bear! That’s just being silly! Don’t be silly!” —Jim Cramer, responding to a viewer’s e-mail on CNBC’s Mad Money, March 11, 2008
Hopefully, Peter got a second opinion. Six days after the volatile CNBC host made his emphatic pronouncement, Bear Stearns faced the modern equivalent of an old-fashioned bank run. Amid widespread speculation on Wall Street about the bank’s massive exposure to subprime mortgages, Bear’s shares lost 90 percent of their value and the investment bank was sold for a pittance to JPMorgan Chase, with a last-minute assist from the U.S. Federal Reserve.
Now in fairness, Fox News contributor Bill Kristol gets worked over, too, for predicting that Hillary Clinton would blow away Barack Obama in the Democratic primaries, and another contributor, Charles Krauthammer, is worked over for a bum prediction about Russia.
But the key words here are "host" and "contributor." Cramer is a host--he is supposed to be reliable. Kristol and Krauthammer are contributors--they are supposed to have opinions, maybe even be provocative. They have much more leeway to be wrong.
And of course, Cramer was similarly wrong about Wachovia, to name just another stock that he was touting.
