How does CNBC's Jim Cramer keep his job?
I'll admit, my opinion of CNBC star Jim Cramer is colored by a 2006 column he penned for New York magazine, advising the New York Times to drop its print edition entirely -- despite the fact that the print version earns much of the money that makes all the online content possible.
It was typical Jim Cramer: a hyperbolic take on conventional wisdom framed with an incredulous why-don't-they-see-this bombast. Based on no real analysis of profit, losses or any other measures of business success, as an added bonus.
Which brings us to this morning, when Cramer offered a non-apology apology on NBC's Today show for delivering a hysterical, get-out-of-the-market message just before the Dow Jones dropped another breathtaking 300 points to dip below 10,000 for the first time since 2004.
He had told Today viewers on Monday to take any money they wanted to access over the next five years out of the market, a message one angry e-mailer compared to "yelling fire in a crowded building." This morning, a much more subdued Cramer whined to anchor Meredith Vieira "should I just tell people, 'You know what, things are fine,' because I don't want to take any heat?"
This acknowledgment came less than a week after Cramer apologized for recommending viewers buy Wachovia stock -- he was great pals with the company's CEO, Robert Steel -- right before the stock price tumbled from about $10 a share to just under $2. Cramer offered a similar "explanation" for his mistake judging investment bank Bear Sterns, telling viewers in March "Bear Stearns is fine" just before the company collapsed over a weekend and sold itself for $2 per share.
That's more classic Cramer: Spinning past positions to minimize mistakes. (A friend and fellow Cramer hater sends along this link to a CJR story about how CNBC banished reporters from Barron's from its air after they proved Cramer's stock picks did worse than the general market)
That the Today show has turned Cramer into some percolating sage of financial wisdom during the country's increasingly frightening economic meltdown is grounds for journalistic malpractice charges, anyway. Cramer's unbridled enthusiasm and shoot-from-the-hip style is tailor-made for hyping empty trends and mistaking momentary blips for larger movements. It's as if one of those hyperventilating adrenaline junkies on the stock exchange floor were given his own cable show and space on America's most-watched morning program.
Cramer's squirming today just exemplifies a problem many TV business analysts face every time a big economic bubble bursts. Hobbled by past cheerleading and missed calls, it's tough to take their reporting seriously as conditions deteriorate; if they couldn't catch these problems before they became big news -- and built big audiences riding the same wave that made millions for their CEO pals -- why should anyone trust their analysis now?
All this is made more ironic by the fact that Cramer gave essentially sound advice Monday; people should be taking short-term money out of a plunging stock market, despite the fact that it makes the plunging get worse. But when you've been a cheerleader for so long, sometimes it's tough to step into a new role without surprising a few people.