My Letter to Jon Stewart and Jim Cramer

Jim Cramer (Mad Money, TheStreet.com and Jon Stewart of Comedy Central went head-to-head late last week, and here is my letter to both networks in response):
:::

I'm a huge fan of both shows. You entertain me. And I'm talking years here.

I'd like to think that both Jon Stewart and Jim Cramer are in this position, of collecting 2,000 comments on the blog immediately following the airing of their toe-to-toe battle interview, because they want to be. As willing, educated, brilliant and active participants in our democratic process and civil servants to the debate of the free market system. And, a little bit because they both love the limelight. As entertainers.

Certainly, both men have impressive resumes and historical measures of their respective brilliance. Big brains. There is no denying that. However, both of them failed to place blame on where Wall Street bumps into Main Street, and the Universe collapses on itself: Original Sin.

Isn't, to a certain extent, human nature to blame, in this current debacle? Aren't we all pleased when we find out a stock we bought yesterday went up 30% due to some unexpected news? And likewise, isn't a 7-year old selling lemonade just delighted when the heat index breaks 100 degrees and there is no other liquid to be found nearby? Aren't all of loyal Cramerica fans dedicated to the idea that with sane, thorough, fundamental analysis of stocks, you, too can profit handsomely with your investment dollars?

Don't we all like to laugh at Jon Stewart's brilliant rhetoric?

Yes, yes, and oh by the way--we're all a little greedy, too*. Who didn't appreciate their home increasing in value (an unsustainable) 20%, or their stock portfolio increasing four-fold over the same number of years? Nobody wants nothing for their work and labor. It's called Human Nature.

I believe that those who have more, should give more, and those who don't, can get help. I strongly believe Jim Cramer and Jon Stewart, deep in their hearts, feel the same way, ideologically.

However! There are very complex financial instruments out there, which beget complex financial markets. I only understand a tenth of it having worked on a trading floor in MARKET RISK MANAGEMENT. I was measuring Market Risk for equity derivative trading portfolios.. and.. guess what?! Traders are smart. Traders are sneaky. Traders like to WIN. And they like to make money. And.. add some overleveraged banks, not enough capital, mortgages defaulting and de-valuing assets across the board, credit seizing up, commerce halting, the People getting caught in the middle and... here we are.

Jon Stewart asked the excellent point-question: "What is our role as journalists, if not to reveal the very shenanigans going on behind the uninformed Public's back..if we know about them?"

Certainly, Jim Cramer is not the face of whom we blame. His network? Could they have done more?

One of my favorite quotes:

Integrity is what you do when nobody is watching.

What about when we are?


* Note: NOT that I blame what has happened in the current crisis on the People, per se, simply that it was too easy to allow current market conditions to be ripe for bankers/traders/etc. to reap the benefits of (us) it in the capital markets.

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Combination List of Random Things on My Mind

Mama Kat's Writing Workshop is one of my favorite blogging games, because it's not just a game. It's a way of life. I write because I like to talk. I talk because I cannot help it. So, by the transitive property of equality.. you do the math. This week, several prompts are challenging. I chose the cop-out prompt. The list.

Though, lists have been getting me into trouble lately. (See having to talk about Ricki Lake.)

4) Write a list of ten things on your mind this week.

1. Why (for goodness' sake, why) did I mention something in a list that I didn't want to admit, describe, remember or go into detail about? Should I tell the Kevin Costner story to make up?
2. Do we really need a new refrigerator?
3. Is a bird in the hand worth two in the bush? What if there are three in the bush? And five more in the shrubbery to the left of the cart path? How much is a bird worth? [This is a serious matter.]*
4. Will my Asian yogis forgive me for having to take my toddler to the doctor instead of teaching them their weekly yoga?
5. If Keynesian economics has never truly been tested, and the Senate agrees on a number between $700B and $900B, then will "negative (public) saving that deficits represent .. largely offset the positive economic effects from addressing the broader set of longer-term saving and investment needs"? **
6. Is it really important how many comments I get on a blog post? [YES.]
7. "Hey. YA-AH. Baby, I got cha number."
8. Should my husband take that job he was offered this morning?
9. I cannot believe we became victims of this economic downturn. Oh wait, yes I can.
10. It's an interesting calculation: how much productive time has been lost in the past week from people completing the "25 Random Things" survey on facebook? Do we all need that much attention from each other? Has anyone not done this yet? Does anyone not know what I'm talking about? Have you been living under a rock (quote from UVA undergrad working at Best Buy when we tried to buy an iPod "mini" end of 2005)?

* See #8
** EconomistMom.com

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Focal Point

My son's newest party trick is singing "Twinkle Twinkle" to himself, all throughout the day. To grandma's sheer delight, he sang her a melodic bar of it this week. We can hear him singing to us early in the am via his monitor, from his little man kingdom (e.g. crib.) We can't get enough of it. Ergo, he can't get enough of us not getting enough of it. Before that, it was climbing on the kitchen chair and banging the keyboard on which I now type. Prior to that, he had a killer 'toothy grin' (and if you've seen it in real life, well. You know.)

Our focus then, continually changes with these developmental stages.. when he can do more, understand more, vocalize more, we latch onto it and ride the new stage's wave. Sometimes it becomes hard to look back and envision the start of the stage, when he could first start saying the syllable of that new word. When he could sing. When he started to run down the hallway, stubby arms overhead, careening around a corner. When did that start again?

Is that not exactly what's happening with the financial meltdown?

Take this quote from a recent Washington Post article about AIG's implosion:

Many of the most compelling aspects of the economic cataclysm can be seen through the story of AIG and its Financial Products unit: the failure of credit-rating firms, the absence of meaningful federal regulation, the mistaken belief that private contracts did not pose systemic risk, the veneration of computer models and quantitative analysis.
(Washington Post, 12/29/08, The Beautiful Machine)

In other words, we all weren't all that focused on what was going on. People were making money on Wall Street, super. Stocks were going up, great. Credit Default Swaps and Hedge funds went unregulated. So what? (OR, in some cases, from Congress, "what are those?")

Remember that $168 Billion stimulus package in Feb. 2008? The Facebook group "I'm sending my stimulus check to Barack Obama?" Remember that Bear Stearns failed in March, a month later? But still, we enjoyed a nice bump in the stock market in the first half of the second quarter that followed. The point is, we weren't entirely all on the same page. Some were still sending vast sums to Bernard Madoff, while panic-stricken Bear employees had their bright futures and 401(k)s ripped away from them.

It's interesting to think about focus. Now we're all panic-stricken. The latest bad economic news is always a text or breaking email away or blog post away. We know how bad the numbers are, and we know right away. The information flow is unlike anything our economy has ever seen--New or Old. Just like we like to sing "Twinkle, Twinkle." We can't stop.

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Economics Junkie

I try to maintain the belief that everything happens for a reason. That's an easier way to digest the economic and business-related news of the day. See my pal K's post from today.

In other related news, as I sit here, my hands are so cold it's difficult to type. We moved a space heater into my 18-mo old's room last night, because apparently, when they built houses in 1949, they didn't think it was necessary to prevent cold from coming in. I live with the frugalist of the frugal, the minimalist extraordinaire, a man who takes pride in a lifetime ban on non-essential spending. I've been doing my part to counter that, no doubt.

But the point remains, we are not very leveraged. We have a generous amount of equity in our tiny cold house, we don't really spend a lot and we're saving. So, when I see that foreclosures are at an all-time high, non-farm payrolls were abysmally worse than expected in Dec., nobody bought anything for the holidays, Madoff is still walking around the streets of NYC, and the nationwide unemployment rate released today is 7.2%, I have to think, "this must be necessary."

It is painful. It is scary. It is unequivocally the worst financial crisis of our time when traders screwing around with mortgage-backed securities and credit default swaps can take down Bear Stearns, Lehman Brothers, shake Fannie and Freddie to the core, bring Merrill Lynch and AIG to their knees and chase Wachovia into the arms of Wells Fargo. It's a horrible fact that some of these Wall Street jobs just might not be back. Party over!

But... in the back of our collective minds, are we asking ourselves, "is this a necessary evil?" Are we living Joseph Conrad now, choosing our future Responsible Lender/Spender selves as a lesser evil over the past hyper-consumerism? Were ours Hearts of Darkness, now destined to be lighter, in spirit and in debt? Aware of a greater collective purpose?

I hope so.

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Pearlstein and our Economic Dent

My favorite Washington Post columnist, Steven Pearlstein, today likened the big 3 Automakers "bailout" (or, more correctly, emergency bridge loans to get their house in order) to an insurance policy. Just like an auto policy we take out to protect our cars from total loss, the government insuring us all against the worst of the worst.. a prolonged, deep recession, nay, a "Great Depression." I think this is an interesting way to look at it, especially considering the billions of liquid money that the Fed has pumped into our economy, seemingly into a black hole, since there is no trace of it in the credit markets.

So, in our nod to the rough economic roads ahead, we did our part today. All day. All. Day. Christmas shopping. At, of all places, a mall. (Gasp) And, with a toddler in tow. (Deeper gasp)

However, I'm happy to report that it went well. Through the herd, around the herd, we made our way through the Legoes, the Hannah Montana, Transformers, and did you know that Galaga is back?! (A little remote control you plug into ANY television, that comes pre-loaded with 200 games from my childhood, Galaga, Dig Dug, Pacman, Tetris, Centipede.. are you having flashbacks yet?)

Ho, ho, ho, and a bottle of rum (though the Lego Pirate ship ironically didn't picture any. Factual?) Our 18-mo old was a star, waving when he was asked, making funny faces when he saw himself in the mirror, entertaining himself by careening down an aisle at LL Bean just as I'd set the 5 or 6 large packages down next to my purse next to the stroller next to the crowd gathered by the fish tank. JUMPing out at the lady as she walked into LL Bean, having mysteriously crouched himself behind a sign. Ah, the holidays and childhood.

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Pearlstein

My favorite Washington Post columnist.. and I'm not the only one that thinks so.

One part snark. Ok, many parts snark. One part David (vs. Goliath), you know, fighting for the little guy. One part Liberaltarian. That's right.. you read that word here first. That's my own doing. Of course, after I post this, I'll Google it to see if anyone else has come up with something similarly brilliant.

Pearlstein writes for the Business section for the Washington Post, and is not on anyone's "side". Definitely not Washington's "elite" politicos. He tells it like it is, and calls people out on "it", whether it is bank executives, blowing up their fiduciary responsibility from lack of attention to details like leveraging themselves to the brink of failure, or the car manufacturers for failing for years upon years to take their efficiency "mandate" seriously. Or drug companies for.. being drug companies. Or an Administration, for taking too long to solve the credit markets seizing up, and for failing to cool down markets that flare up. Or--and this is my favorite, Mass Media, for creating frenzied waters that more often than not, would be a lot more calm if people were lead to think what they would think on their own. Without the help of "sky is falling" "Great Depression" references that tell us there is no hope in tomorrow. That, friends, is GONE.

Whomever it is, they aren't getting off easy. He lets 'em have it, and backs it up with actual information: financial instrument details (that I particularly enjoy, having worked on a trading floor for Risk Management,) credit markets structure, capital markets, equity markets, business savvy and general common sense.

Sometimes it's that last one that goes the furthest.

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