*OT* 9/6/98 SF Examiner. Bears even popping up on CNBC now
[Ackerman has been bearish for a long time. The CNBC dirt is fun.]
examiner.com
I WAS preparing a column about CNBC last week
when the following message arrived via e-mail from my
friend and colleague, Michael Belkin: "Belkin on
CNBC Bubblevision? Today at 3:40 EST? How'd that
happen?"
How, indeed?
Belkin, an investment consultant based in New York,
is one of the gloomiest prognosticators in print. His
newsletter is nearly as scary as my Sunday column,
and for that reason I turn to it often - especially when
my common sense has been momentarily impaired by
the occasional, unwonted twinge of bullishness.
Now, here is Belkin on national television, telling a
million CNBC viewers to screw down the hatches and
get ready for a financial monsoon. The Dow Jones
industrial average has only begun to fall, he warns, and
it is likely to plunge another 20 percent or more before
finding anything resembling a possible bottom.
Ironically, the column I started to write was going to
say that the opinions of a Wall Street renegade like
Michael Belkin would never make it onto CNBC, at
least not in time and with sufficient emphasis to save
the widows and orphans whose savings this bear
market is about to devour.
Unfortunately CNBC didn't allow Belkin enough time
to elucidate a daunting thesis he developed in a recent
newsletter.
What he wrote was that an economic implosion, much
like the one that has suffocated Asia, is brewing in our
own backyard.
Belkin notes that Canadian businesses have been
borrowing vast quantities of U.S. dollars, simply
because those dollars have been so very easy to
obtain.
Now, however, with the Canadian currency collapsing
relative to ours, their debts are almost certain to
become a crushing burden. This is a frightening
prospect, considering that Canada is our largest
trading partner.
With such troubles festering nearby, and stock
averages around the world free falling on most days,
it's no wonder guys like Belkin are starting to get a little
respect and some air time, even if the news media
keep dossiers on them in their "crackpot" files.
I'm probably in that file myself, having been banned
from CNBC two years ago.
I appeared on that network after accurately predicting
in my newsletter that the pumped-up shares of Yahoo
would collapse soon after the company went public.
Only in the blithe, helium-rich air that seems to engulf
the CNBC newsroom could such a forecast have been
regarded as prescient. Although Yahoo had yet to
make a dime, investors valued the company at more
than $1 billion on the day of its initial public offering.
The faux pas that got me "86'd" was to have said, in
response to a question about my extreme bearishness,
that it was a good way to sell newsletters.
The remark was facetious, and I quickly qualified it as
such. As readers of this column will attest, I am surely
no bear poseur. But no amount of kissing up would get
me reinstated.
Thus banished from the airwaves, I tuned to Judge
Judy, Jenny Jones and Jerry Springer during trading
hours.
To my surprise, my long-range forecasts began to
improve. For instance, I "knew" - and wrote - that
the Fed would not raise interest rates, even though the
supposed likelihood of this was arguably the dominant
theme of CNBC's business coverage during the last
three years.
During that time, I occasionally tuned soundlessly to
CNBC, so that I could watch the ticker tape. Even
without the sound it was plain to see they were moving
toward a show biz model.
One by one, the on-camera heavyweights quietly
disappeared, like university professors during Stalin's
purge. Gone was Neil Cavuto, whose hardball
interviews had helped give CNBC an edge. Then the
redoubtable Karen Gibbs vanished, leaving a gaping
hole in the network's coverage of fixed-income
markets.
And now, crowning CNBC's segue into show biz is
their rising star on the exchange floor, Maria
Bartiromo, whose gamin looks have made her the
reigning poster girl of the Internet's financial
newsgroups and earned her the sobriquet "The Money
Honey."
She's not dumb, but it remains painfully obvious after a
year on the job that she came to it knowing almost
nothing about the stock market, and that she has not
learned much since.
To make matters worse, the guy she replaced, Roy
Blumberg, was one of the savviest market analysts
ever to find his way into television. His unheralded
departure was like losing Sam Donaldson at the White
House, only to see him replaced by Kathie Lee
Gifford.
While I doubt that CNBC's front office conspires to
suppress gloomy news, the all-day-long show's
preference for upbeat stories and attractive faces is
intrinsic to the medium.
Knowing this, it is Jimmy Rogers' genius to wear a
bow tie when he is interviewed - with increasing
frequency of late - as one of CNBC's two token
bears. (Michael Metz is the other.)
John Murphy, a widely respected technical analyst
who also left CNBC during the still-unacknowledged
purge, implicitly confirmed the network's distaste for
the negative when I spoke with him at a recent
investors conference in San Francisco.
Murphy said the more bearish his presentation on a
given day, the less air time he received.
Investors should remind themselves that TV's primary
mission is not to enlighten or entertain, but to attract an
audience that advertisers will pay through the nose to
reach.
With a bear market almost certainly upon us, those
advertisers - mostly brokerage houses and mutual
funds - can rely on CNBC to calm the herd and
keep it pointed toward the greener grass of a mythical
Dow 10,000.
But I cannot imagine what they will find to talk about if
the months-long bear market stretches into years.
When the Dow is trading 2,000 points lower, will their
A-list pundits say, as one did last week, that
"strategists are a bit more confident with stocks at
these levels." And will virtually every interview continue
to end with CNBC's signature question: What is the
one stock you would buy?
It could get tiresome quickly, especially if nine out of
10 stocks are falling, as one should expect in this bear
market.
These days, from the bear's perspective nearly every
word uttered on CNBC sounds like nonsense, some
of it possibly dangerous to your financial health.
"Keep your powder dry," said one buy-side
mouthpiece the other day. Taken literally, this tidbit of
wisdom implies that every investor should liquidate his
or her portfolio and use the proceeds to buy stocks
when they are more reasonably priced.
Can you see the fallacy of this zero-sum strategy,
assuming millions of investors implement it in the
coming weeks?
Asia is in a depression, Japan's banks are tottering and
Russia is on the verge of anarchy. U.S. corporate
earnings have been falling for the last three quarters
and are about to make it four in a row.
We are in a bear market now, and any investor who
believes a puny 20 percent sell-off has ended it is
going to get crushed. I can say that because I do not
make my living from advertising revenue.
I can also say that, if you want to hold onto what
remains of your nest egg, you should tune out CNBC
and subscribe to any of the dozen or so newsletters
that saw the July/August bloodbath coming.
The CNBC pundits surely did not.
DAILY || FRONT | NEWS | SPORTS | BUSINESS | STYLE | OPINION
| CLASSIFIED
WEEKLY || TRAVEL | CAREER SEARCH | REAL ESTATE | MAGAZINE
| HABITAT | EPICURE
TOP OF PAGE
|
