Jim Cramer gets Pounded by John Stewart on the Daily Show

[SanDiegoDave]

afx114… your timeline is off.

From Robert Bianco via USA Today:

“…the feud began when Stewart’s Comedy Central series, The Daily Show, answered Santelli’s rant against the bad judgment shown by homeowners with a video reel mocking CNBC’s own bad judgment in covering the economic meltdown. Cramer complained that the reel took some of his comments out of context, which led Stewart to do an even funnier, nastier clip reel aimed solely at him.”
(emphasis mine)

That line, about Cramer complaining that his comments were taken out of context, was in an article Cramer wrote that was dealing with the larger issue of Obama and the budget & stimulus (and all the grief Cramer was getting for his criticism of it). All of this happened before the Martha Stewart and Morning Joe appearances.

My opinion is that Stewart opted escalate the issue with Cramer due to Cramer’s critical analysis of Obama – not because he genuinely wanted to get into the nuances of financial journalism.

That is how Stewart operates. He rarely ever debates people on the merits of anything. He instead goes after them ad hominem – finding any instance of contradiction they have ever had or a personal mistake they made in their life, and then magnifies it in Daily Show style.

I’m not defending Jim Cramer here. He’s a big boy and will sleep in the bed he made. I’m just pointing out that in all the reporting and blog posting that has been going on, what’s being left out are what I consider to be Stewart’s true motivations. Some may disagree with me on it. But after observing the guy and The Daily Show for many years, it was obvious to me what really irked him about Cramer.

[Allan from Fallbrook]

Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.

[Allan from Fallbrook]

Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.

[Allan from Fallbrook]

Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.

[Allan from Fallbrook]

Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.

[Allan from Fallbrook]

Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.

[davelj]

[quote=Allan from Fallbrook]Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.[/quote]

I can’t disagree with that. Which reminds me of yet another great quote (this time from Keynes): “Worldly wisdom teaches that it is better to fail conventionally than to succeed unconventionally.”

I think a lot of folks kind of knew in the back of their minds that we COULD be headed for trouble. But, like Chuck Prince – he of “so long as the music’s playing we have to dance” fame – there are too many financial jobs that are evaluated and compensated based on short-term performance measures. In other words, it simply pays too well to fail conventionally as things are currently structured.

I like Jim Grant (of Grant’s Interest Rate Observer), for example, but Jim would have been fired from running a bank back in 1998 for being unwilling to underwrite loans. (He’s unconventional, you see.) This “dancing” issue is a huge problem because (1) everyone presumes they’ll be able find a chair when the music stops, and (2) you get fired if you stop dancing too soon.

Anyhow, on a related issue, we obviously need regulatory overhaul with the banks, etc. But what we REALLY need – and what’s REALLY at the root of our problems – is a system of misaligned incentives, specifically getting paid in the short-term for instruments that are risky and display a long-term payout.

Mortage brokers getting paid today to underwrite mortgages that would explode later. Lenders getting paid today to underwrite construction loans that would explode later. Traders getting paid today to execute strategies that would explode later. Wall Street securitization desks getting paid today to securitize and sell mortgage securities that would blow up later. Insurance underwriters (think AIG Financial Products unit) getting paid today to underwrite risks that would blow up later.

While we need regulatory changes big time, it’s pretty clear to me that these changes will be all for naught if they don’t address incentives. If we’ve learned one thing from this whole debacle it’s that, for better or worse, people respond to incentives.

[davelj]

[quote=Allan from Fallbrook]Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.[/quote]

I can’t disagree with that. Which reminds me of yet another great quote (this time from Keynes): “Worldly wisdom teaches that it is better to fail conventionally than to succeed unconventionally.”

I think a lot of folks kind of knew in the back of their minds that we COULD be headed for trouble. But, like Chuck Prince – he of “so long as the music’s playing we have to dance” fame – there are too many financial jobs that are evaluated and compensated based on short-term performance measures. In other words, it simply pays too well to fail conventionally as things are currently structured.

I like Jim Grant (of Grant’s Interest Rate Observer), for example, but Jim would have been fired from running a bank back in 1998 for being unwilling to underwrite loans. (He’s unconventional, you see.) This “dancing” issue is a huge problem because (1) everyone presumes they’ll be able find a chair when the music stops, and (2) you get fired if you stop dancing too soon.

Anyhow, on a related issue, we obviously need regulatory overhaul with the banks, etc. But what we REALLY need – and what’s REALLY at the root of our problems – is a system of misaligned incentives, specifically getting paid in the short-term for instruments that are risky and display a long-term payout.

Mortage brokers getting paid today to underwrite mortgages that would explode later. Lenders getting paid today to underwrite construction loans that would explode later. Traders getting paid today to execute strategies that would explode later. Wall Street securitization desks getting paid today to securitize and sell mortgage securities that would blow up later. Insurance underwriters (think AIG Financial Products unit) getting paid today to underwrite risks that would blow up later.

While we need regulatory changes big time, it’s pretty clear to me that these changes will be all for naught if they don’t address incentives. If we’ve learned one thing from this whole debacle it’s that, for better or worse, people respond to incentives.

[davelj]

[quote=Allan from Fallbrook]Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.[/quote]

I can’t disagree with that. Which reminds me of yet another great quote (this time from Keynes): “Worldly wisdom teaches that it is better to fail conventionally than to succeed unconventionally.”

I think a lot of folks kind of knew in the back of their minds that we COULD be headed for trouble. But, like Chuck Prince – he of “so long as the music’s playing we have to dance” fame – there are too many financial jobs that are evaluated and compensated based on short-term performance measures. In other words, it simply pays too well to fail conventionally as things are currently structured.

I like Jim Grant (of Grant’s Interest Rate Observer), for example, but Jim would have been fired from running a bank back in 1998 for being unwilling to underwrite loans. (He’s unconventional, you see.) This “dancing” issue is a huge problem because (1) everyone presumes they’ll be able find a chair when the music stops, and (2) you get fired if you stop dancing too soon.

Anyhow, on a related issue, we obviously need regulatory overhaul with the banks, etc. But what we REALLY need – and what’s REALLY at the root of our problems – is a system of misaligned incentives, specifically getting paid in the short-term for instruments that are risky and display a long-term payout.

Mortage brokers getting paid today to underwrite mortgages that would explode later. Lenders getting paid today to underwrite construction loans that would explode later. Traders getting paid today to execute strategies that would explode later. Wall Street securitization desks getting paid today to securitize and sell mortgage securities that would blow up later. Insurance underwriters (think AIG Financial Products unit) getting paid today to underwrite risks that would blow up later.

While we need regulatory changes big time, it’s pretty clear to me that these changes will be all for naught if they don’t address incentives. If we’ve learned one thing from this whole debacle it’s that, for better or worse, people respond to incentives.

[davelj]

[quote=Allan from Fallbrook]Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.[/quote]

I can’t disagree with that. Which reminds me of yet another great quote (this time from Keynes): “Worldly wisdom teaches that it is better to fail conventionally than to succeed unconventionally.”

I think a lot of folks kind of knew in the back of their minds that we COULD be headed for trouble. But, like Chuck Prince – he of “so long as the music’s playing we have to dance” fame – there are too many financial jobs that are evaluated and compensated based on short-term performance measures. In other words, it simply pays too well to fail conventionally as things are currently structured.

I like Jim Grant (of Grant’s Interest Rate Observer), for example, but Jim would have been fired from running a bank back in 1998 for being unwilling to underwrite loans. (He’s unconventional, you see.) This “dancing” issue is a huge problem because (1) everyone presumes they’ll be able find a chair when the music stops, and (2) you get fired if you stop dancing too soon.

Anyhow, on a related issue, we obviously need regulatory overhaul with the banks, etc. But what we REALLY need – and what’s REALLY at the root of our problems – is a system of misaligned incentives, specifically getting paid in the short-term for instruments that are risky and display a long-term payout.

Mortage brokers getting paid today to underwrite mortgages that would explode later. Lenders getting paid today to underwrite construction loans that would explode later. Traders getting paid today to execute strategies that would explode later. Wall Street securitization desks getting paid today to securitize and sell mortgage securities that would blow up later. Insurance underwriters (think AIG Financial Products unit) getting paid today to underwrite risks that would blow up later.

While we need regulatory changes big time, it’s pretty clear to me that these changes will be all for naught if they don’t address incentives. If we’ve learned one thing from this whole debacle it’s that, for better or worse, people respond to incentives.

[davelj]

[quote=Allan from Fallbrook]Dave: I agree with much of what you’ve said, but I would like to post a bit of rejoinder when it comes to risk. When you have no less a luminary than Alan Greenspan touting the efficacy of all these newfangled financial instruments and how they are effectively distributing risk throughout the entire system, well, there are a lot of folks, including some seasoned financial pros, who are going to take that at face value and behave accordingly.

The fact that they should not have is patently obvious, but it underscores my point that the entire system was a rigged game and one that was, to a certain extent, backed (verbally) by the “full faith and credit of the United States government”.[/quote]

I can’t disagree with that. Which reminds me of yet another great quote (this time from Keynes): “Worldly wisdom teaches that it is better to fail conventionally than to succeed unconventionally.”

I think a lot of folks kind of knew in the back of their minds that we COULD be headed for trouble. But, like Chuck Prince – he of “so long as the music’s playing we have to dance” fame – there are too many financial jobs that are evaluated and compensated based on short-term performance measures. In other words, it simply pays too well to fail conventionally as things are currently structured.

I like Jim Grant (of Grant’s Interest Rate Observer), for example, but Jim would have been fired from running a bank back in 1998 for being unwilling to underwrite loans. (He’s unconventional, you see.) This “dancing” issue is a huge problem because (1) everyone presumes they’ll be able find a chair when the music stops, and (2) you get fired if you stop dancing too soon.

Anyhow, on a related issue, we obviously need regulatory overhaul with the banks, etc. But what we REALLY need – and what’s REALLY at the root of our problems – is a system of misaligned incentives, specifically getting paid in the short-term for instruments that are risky and display a long-term payout.

Mortage brokers getting paid today to underwrite mortgages that would explode later. Lenders getting paid today to underwrite construction loans that would explode later. Traders getting paid today to execute strategies that would explode later. Wall Street securitization desks getting paid today to securitize and sell mortgage securities that would blow up later. Insurance underwriters (think AIG Financial Products unit) getting paid today to underwrite risks that would blow up later.

While we need regulatory changes big time, it’s pretty clear to me that these changes will be all for naught if they don’t address incentives. If we’ve learned one thing from this whole debacle it’s that, for better or worse, people respond to incentives.

[danthedart]

[quote=SanDiegoDave]
My opinion is that Stewart opted escalate the issue with Cramer due to Cramer’s critical analysis of Obama – not because he genuinely wanted to get into the nuances of financial journalism.

That is how Stewart operates. He rarely ever debates people on the merits of anything. He instead goes after them ad hominem – finding any instance of contradiction they have ever had or a personal mistake they made in their life, and then magnifies it in Daily Show style.

[/quote]

I agree with this. If you watch Morning Joe, Scarborough rips Stewart a new one and Cramer does NOT join in and in fact defends Stewart a bit by saying he’s a comedian.

[danthedart]

[quote=SanDiegoDave]
My opinion is that Stewart opted escalate the issue with Cramer due to Cramer’s critical analysis of Obama – not because he genuinely wanted to get into the nuances of financial journalism.

That is how Stewart operates. He rarely ever debates people on the merits of anything. He instead goes after them ad hominem – finding any instance of contradiction they have ever had or a personal mistake they made in their life, and then magnifies it in Daily Show style.

[/quote]

I agree with this. If you watch Morning Joe, Scarborough rips Stewart a new one and Cramer does NOT join in and in fact defends Stewart a bit by saying he’s a comedian.

[danthedart]

[quote=SanDiegoDave]
My opinion is that Stewart opted escalate the issue with Cramer due to Cramer’s critical analysis of Obama – not because he genuinely wanted to get into the nuances of financial journalism.

That is how Stewart operates. He rarely ever debates people on the merits of anything. He instead goes after them ad hominem – finding any instance of contradiction they have ever had or a personal mistake they made in their life, and then magnifies it in Daily Show style.

[/quote]

I agree with this. If you watch Morning Joe, Scarborough rips Stewart a new one and Cramer does NOT join in and in fact defends Stewart a bit by saying he’s a comedian.

[danthedart]

[quote=SanDiegoDave]
My opinion is that Stewart opted escalate the issue with Cramer due to Cramer’s critical analysis of Obama – not because he genuinely wanted to get into the nuances of financial journalism.

That is how Stewart operates. He rarely ever debates people on the merits of anything. He instead goes after them ad hominem – finding any instance of contradiction they have ever had or a personal mistake they made in their life, and then magnifies it in Daily Show style.

[/quote]

I agree with this. If you watch Morning Joe, Scarborough rips Stewart a new one and Cramer does NOT join in and in fact defends Stewart a bit by saying he’s a comedian.

[Author]

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