The Cable Gamer sat down today and watched, for a second and third time, the epic smackdown of Jim Cramer by Jon Stewart on Comedy Central's "The Daily Show."
You can read about Stewart clobbering Cramer here, here, and here, but the real wallop comes from watching the video. Indeed, it's worth watching more than once because this March 12 event is going to be remembered as one of the great televised confrontations of all time, right up there with the 1954 Army-McCarthy hearings,where Joseph Welch so legendarily smacked down Sen. Joe McCarthy.
And it will also be remembered as the moment when Stewart entered, with both feet, into the political culture, where his hard-earned and well-deserved reputation as a truth-teller make him welcome, indeed.
Stewart started the interview by letting Cramer dump on his fellow CNBC-er, Rick Santelli and Cramer jumped at the opportunity: "I disliked what he said, it was bad." That left Stewart to say that at least Santelli had been consistent in his opposition to bailouts. (Cramer vociferously supported the "TARP" bailout last fall, which Barack Obama voted for, and has been generally supportive of the Obama administration's big-spending plans.)
Moving into the nature of Cramer's "Mad Money" show on CNBC, which touted so many losing stocks, Stewart quoted Cramer's fellow CNBC-er, Erin Burnett, as saying "he has to make these [stock] picks." To which Stewart asked, "Is that a genetic condition?" As in, Cramer had no choice but to tout stocks, no matter what their quality?
And that led Stewart to move to the heart of his critique, noting: "The gap between what CNBC advertises it as, and what it is,"
adding, "we're both snake oil salesmen, to a certain extent, but on this show we label ourselves as snake oil."
For his part, Cramer didn't attempt to extricate himself from Stewart's charge that he was a snake oil salesmen, perhaps because he was afraid of what Stewart would say. But Cramer did have his own attempted p.r. counter-offensive to roll out, telling Stewart, "I am trying to expose this stuff."
Which led Stewart to press Cramer on his own expressed history of short selling--he called it "really rewarding"--at a time when CNBC was promoting stocks as a long-term investment. As Stewart put it, "CNBC could be an incredibly powerful tool of illumination" for what he called "the two markets"--the "long term" market for ordinary investors and the "short term" for Cramer-type professionals and gamblers. That latter market, of course, is "dangerous and dubious," Stewart said, which is why regular investors should be advised to stay out--and to avoid investments that could be damaged by speculation.
But instead, Stewart suggested, Cramer-type speculators took advantage of the ordinary investments--they didn't help them, they hurt them. "We are capitalizing your adventure," Stewart chided, in which Cramer & Co. go on TV and talk up stocks that they themselves are shorting (that is, betting that the stock will go down). As Stewart put it in his own blunt way, regularly folks "can't recognize the intricacies of your knowledge with the crazy bullshit."
And then he pointed his rhetorical gun right at CNBC: "The financial news industry is not just guilty of a sin of omission, but of a sin of commission." Now that's a strong charge; once again, Cramer didn't say anything in protest against this attack on his good (sic) name.
Instead, Cramer stuck to his argument that he, Cramer was trying to investigate skullduggery. Speaking of his guests, Cramer said, "I wish that people would swear themselves in ... I've had CEOs lie to me." To which Stewart, several times over the course of the 18 minute interview, said variations of, "If you knew that they were lying to you--why didn't you say so?" "Why not report that?" he asked Cramer.
But on top of that, Stewart rolled some video of Cramer speaking at some sort of panel event from 2006, in which Cramer described the tactic of short selling. And then Cramer went further, describing the way that it's done: "You can't foment... but you do it anyway, because the SEC doesn't understand it ... that's the only sense that I would say it's illegal." Cramer went on to describe how rumors could be spread about one particular company, Apple, concerning the then-pending release of the iPhone. Cramer suggested that it would be possible to spread rumors that the carrier companies, AT&T and Verizon, didn't like the iPhone, with the implication being that if the telcos didn't like the iPhone, it would be a bust, and Apple stock would be hurt. Such tactics are always dubious, ethically and legally, of course, but in this case, such trash-talking would not even have been smart--because AT&T and Apple linked up on the iPhone, to the enormous benefit of both companies.
So what exactly was Cramer saying on this videotape? Was he saying that he had done these things? Or was he describing tactics that he deplored? Watch the tape, the decide.
For his part, Stewart told Cramer, "I understand that you want to make finance entertaining, but it's not a fucking game,' and added--clearly pointing his own finger of accusation at Cramer--"when I watch that, I can't tell you how angry it makes me."
When Cramer againg repeated that he was opposed to what was happening, Stewart shot back that it's "very easy to get on this, after the fact." And then Stewart jabbed, "You knew that the banks were doing, and yet were touting it, for months and months--the entire network [CNBC] was." Speaking of larcenous CEOs, Stewart snapped, "they were on a Sherman's March through their own companies... they walked away rich as hell."
Interestingly, the Stewart-Cramer confrontation made ABC World News on Friday, but not NBC Nightly News.
But more to the point, this video will be seen everywhere there's interest in American financial markets. And everywhere that there's interest in honest journalism. Which is to say, Stewart 1, Cramer 0. Although the big losers are the American people.
Which leads to my final point: Where's the Securities and Exchange Commission? Cramer, perhaps shrewdly, volunteered that he voted for Obama, but will the Obama administration really let the likes of Cramer continue to mislead investors? Sure, loyalty to campaign supporters is important in Washington, but surely keeping faith with the American people is much more important. That 2006 videotape should arouse at least some curiosity on the part of the SEC.
