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If you want to lose all of your money, you could do worse than tune in to CNBC on a regular basis.
The network is a cheerleader for an overvalued stock market and the Federal Reserve policies that have pumped it up – and which are steering the economy straight into another recession.
Seven years after the financial crisis ripped across the globe, the world is mired in debt. This is particularly worrying since the "Debt Supercycle" that began 30 years ago is now supported only by the largesse of increasingly shaky central banks.
Today the world is buried in more than $100 trillion of debt. Hanging over that is another roughly $700 trillion of derivatives. Is it any wonder many economies can't grow when they have to service all of that debt and face such systemic risk?
Of course, the cheerleaders on CNBC have absolutely no clue about what is going on… and the dangers of this ignorance are too important to ignore.
Yes, there are some thoughtful, experienced journalists working at CNBC like David Faber and Steve Liesman – whose pained expression when enduring his colleagues' hyperbole tells a story in itself. And Rick Santelli continues to point to the dangers of what the Fed is doing.
Unfortunately much of the substance of Mr. Santelli's excellent reporting gets lost in his proclivity for ranting rather than reporting. But much of the rest of the staff just engages in mindless cheerleading of the markets or soft-pedaling questioning of equally clueless guests.
The "Pundits" Have No Clothes
On March 18, the Federal Reserve finally admitted that the U.S. economy is in trouble.
That hardly came as news to me. I've been warning for months that economic growth is a mirage. Everybody gets excited about the fact that the unemployment rate is dropping, but there are still millions of people who can't find work and many of those who are employed aren't being paid very well.
Other than jobs data, nearly every other economic release has been negative in 2015. And believe me, it's not just because the weather in the northeast has been cold.
Six years after the low point of the crisis – when the S&P 500 hit its bottom in March 2009 – the ability of the global economy to service its $100 trillion debt load is being called into question.
In fact, the only reason financial markets are not already in deeper crisis is that interest rates have been lowered to zero by the world's major central banks.
If you don't have to pay anything to borrow money, you don't have to worry about servicing your debts. And that's the situation the world's over-indebted countries and corporations find themselves in today.
It's a vicious and highly dangerous fiscal circle, and the end is not going to be pretty.
And that's one of the reasons the Federal Reserve is scared to death to raise interest rates by even a quarter of a point.
That worries me because a lot of people think everyone who works at the financial networks is a financial expert, and what they have to say is both studied and has a level of gravitas associated with experience.
And that's just nonsense…
Because most of them are no such thing and have no such expertise.
They are just reporters – they are merely describing what they are seeing. If the market goes up, they think the economy is healthy. If the market goes down, they get serious looks on their faces and start thinking the economy is in trouble – or worse, claim that it's a buying opportunity.
In fact, they have no clue what is going on because they are merely paid actors. In England, they are called newsreaders for a reason. They read the news. They don't make it and they don't analyze it.
Unfortunately, CNBC anchors speak with authority about things that they know nothing about. And when they do so, and try to provide insights, the results are not only misguided, but dangerous…
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About the Author
Prominent money manager. Has built top-ranked credit and hedge funds, managed billions for institutional and high-net-worth clients. 29-year career.
Steve Liesman may be thoughtful and experienced, but he is still a pure shill for the Fed's and the Administration's Keynesian policies. Rick Santelli may rant, but he still rings truth, journalistic neutrality be d*****.
CNBC has only interviewed people that are positive on the markets! They interview and praise them for their views! They all say the same thing! The markets going higher!
They never ask them why, but….. If you want to sell or preach the truth they put together a slew of CNBC wannabes that will tear your head off and mock you without giving you a chance for rebuttal ! And if you comment on the real unemployment rate they go to a breaking news story!
The U.S. has lost its mojo , the economy is in real trouble, the rich got their bailout, the poor got their handout, ( to some of which I agree) and the middle class which got stuck in the first downturn is left with the bill! Seems fair right? I am disgusted with the whole scenario ! Who will CNBC blame for this fiasco? Maybe their mothers!
You mean to say YOU COULDN'T DO WORSE
I saw that, too. Kept re-reading it, until I figured he meant what you write.
Let's put the cream of the ranter's crop out there. Cramer is the epitome of cheerleading. One minute he is railing against McDonald's because they aren't "natural and organic" (how I so tire of that phrase) and with the next breath he is praising Jack in the Box. I guess the guy in the clown head on their commercials is constantly touting their natural and organic themed restaurants, NOT! Then they give the ranting lunatic his own show during evening commute time. I wish they'd give Faber his own time slot. I can't see his expressions when Cramer goes on the Mad Dash, but I can feel it when Mr. Hyperbole throws out some of his crazy claims. And Faber then has to clumsily take the show in a different direction.
The problem is, where is there a good financial news channel on the radio? Fox Business is too anti-liberal (this coming from a tried and true conservative), CNBC is, well, Mr. Lewitt's article describes their issues. Bloomberg is probably the best but they tend to stay at the macro level and not get into the discussions of particular stocks and equities, which is what I enjoy most.
Maybe someone else will step up. Great article though and thanks for bringing this out.
Try Zero Hedge…
Fact… good analysis and on point observations of trends and events.
Absolutely right they are cheerleaders at CNBC and Pisani is kinda the Grand Marshall of it. However, Steve LIESman is equally as bad in MHO. Much to his credit he has tempered his wording of late, the man is no fool but his job requires him to say foolish things from time to time. Rick Santelli is the best they have over there, hence "The Santelli Exchange" he tells it like it is. Like most of Italian extraction he gets all passionate and excited causing some viewers to miss the point or worse disregard his warnings. All and all I like the show, you just have to take stuff with a shaker of salt. If one is getting their investment advise from CNBC your probably too late. There's information there,just weed thru the BS.
It is a fact that most people lose in stock exchanges while insiders earn. I am second time on a big loss.
Please read and understand the following:
"If you WANT to lose all of your money, you could do worse than tune in to CNBC on a regular basis."
The meaning of which is, if you don't want to lose all your money, you should NOT follow CNBC blindly.
Easy Peazy !
LIFEBOAT
Come on, Tyler Matheson of MSCNBC " Nightly Business Report" knows his stuff. He kept his job. That is all that really matters. Viewers, content, all are just fluff for the audience. He never made a dime in stocks I would wager. Even Jim Cramer has made ( and lost ) money in the markets. I just don't follow other people or crowds, that's all. If and when the house of cards ( global debt ) comes tumbling down, we all will suffer losses and see our way of life changed. It will become very austere.
Just keep out of debt if you can, keep expenses low, and have plenty of cash. Call it your bunker. If debt and the system implodes, there is not much anybody can do to you. Think of the old WWII era movie by Alfred Hitchcock " Lifeboat". The U-Boat survivor had what he needed (water and salt) to outlast everyone else in the lifeboat at drift in open seas. All the others expired in the hot sun and from dehydration. Good lesson if the times turn austere.