If you want to lose all of your money, you could do worse than tune in to CNBC on a regular basis.
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.
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.