On Tuesday, March 11, CNBC Mad Money host Jim Cramer said that Bear Stearns was fine. On Sunday, March 16, JP Morgan Chase announced a bid to take over Bear Stearns for $2 per share with the Federal Reserve as a backup to help with liquidity on bad Bear Stearns debt. This week, Fox Business News ran an ad slamming CNBC and Cramer with the tagline: Turbulent Times Call For A Credible Network.
Cramer is certainly exuberant, and as a trader, is certainly to miss some calls. But without knowing any more about the situation than this, we still side with Cramer. He’s 30-year pioneer in financial media, who was a key player responsible for full disclosure in broadcast financial media. When he was a full time money manager and occasional guest on CNBC as the network made it’s rise, he would set up trades, then go tout his stocks on CNBC so markets would move in the direction of his trades. He was temporarily booted from the network when they found out, then brought back on as the catalyst for CNBC’s policy that requires all guest to disclose positions in securities they discuss. It’s all chronicled in The Fortune Tellers by Howard Kurtz, the media writer for The Washington Post. We highly recommend this book to anyone interested in financial media.
Cramer is more of a trader than a pure reporter, so CNBC gave him Mad Money where he can play the trader role as opposed to fully objective newsman. It’s a good fit, and the disclaimer at the beginning of the show state that his stock talk consists of opinions. He’s a renegade in financial media but has always come out on top because he’s always ahead of the system.
So for Fox to attack Cramer and CNBC is a clever declaration of war in the high-profile Bear Stearns meltdown context. But credible? Watch their flagship closing-bell show called Happy Hour which takes place in a bar … You decide.