The Daily Beast, a sharp publication for in-the-know types, has a major piece on CNBC's Jim Cramer, to which attention must be paid. Reporter Randall Lane, author of a new book, The Zeroes: My Misadventures in the Decade Wall Street Went Insane, teases the contents of his book with a startling accusation: That Cramer actively collaborated with baseball-player-turned-stock-touter Lenny Dykstra, even though Dykstra was a low-life. Actually, those accusations aren't so startling, because Cramer has a long history of . . . well . . . being Cramer. As noted here at The Cable Game many times, Cramer shows a consistent pattern of putting his own interests first, and his audience's interests second--a distant second. He leaves the lawyers and regulators to figure out if he did something wrong.
As Lane puts it:
The stock guru's top pupil, baseball star Lenny Dykstra, was secretly paid to plug stocks on TheStreet.com and give access to Cramer, reveals Randall Lane in his new book, The Zeroes.
In an era of epically wrong financial predictions, boisterous Jim Cramer's declaration that "Bear Stearns is not in trouble!" a week before its March 2008 collapse, rated among the most moronic, or at least the most infamous.
But it turns out that Cramer made one call far worse: He decided to make a stock-picking star out of a mumbling former Major League Baseball All-Star named Lenny Dykstra, giving him a high-profile column and ultimately an expensive "premium" newsletter on Cramer's site TheStreet.com.
Lane continues:
Jim Cramer single-handedly created the concept of Dykstra-as-financial genius. Known mostly for his willingness to crash his body into walls or his cars into trees (nickname: "Nails"), the former New York Met and Philadelphia Phillie became an investment columnist for TheStreet.com in 2005, after sending Cramer an unsolicited email. For the next four years, Dykstra made stock picks, focusing on "deep-in-the-money calls"—a way to buy leveraged options—for tens of thousands of followers on Cramer's website.
Lane says that Cramer probably did not know what a sleazeball Dykstra was, but still, making Dykstra into a celebrity was no service to Cramer's fans, to the people who trusted Cramer:
Cramer, I am sure, had no knowledge of Dykstra's "pay to plug" scheme—an arrangement that could well lead to a Securities & Exchange Commission investigation. He was just a dupe. But his relentless endorsements and promotion of the ballplayer's stock-picking over the years must now surely rank as his most ill-conceived.
But now it's all out in the open, thanks to Lane. And what's Cramer going to do about it? And what's CNBC going to do? And NBC-Universal, the parent company of CNBC? Yes, this means you, Jeff Zucker, not that you care anymore, since all you worry about is your golden parachute. And GE, of course, doesn't care either, since GE is about to unload NBC-U onto Comcast, the cable giant.
And so the buck stops with Comcast. What is it going to do about Cramer, and the terrible show that he perpetrates on CNBC air every weeknight?
Update: Author Lane is now being sued for libel for $100 million. TCG has no idea where the truth lies, she is happy enough buying popcorn for a ringside seat at the trial. But she does wonder what the Securities & Exchange Commission will do, and what it will uncover if it investigates. Given the size of the market meltdown, it won't be pretty. Once again, from a Cable Game perspective, the real issue is Cramer, and CNBC, and his new bosses at Comcast.
