Hover over this image for caption and link ↓↓↓

Three months ago, I wrote an Open Letter to Dylan Ratigan with my case as to why he should stick with financial media after his departure from CNBC. At the time I laid out two options that seemed most probable for him:

So as you evaluate new options, I am sure there are many but as I see it, they basically fall into two camps: (1) extreme consumerism, which you’ve proven you can do, (2) smart, actual financial news for financial professionals. more…

Dear Dylan: I read about your fiery departure from CNBC, and that’s the only way I would have heard about it because I stopped watching CNBC around January 2008.

CNBC had been a critical part of my all-day regimen for 13 years, but I stopped watching because CNBC turned into your typical shouting-match cable news network not long after the credit crisis began in August 2007. Larry Kudlow and Jim Cramer always set a certain general level of hysteria but even they had their place. But then, as my theory goes, CNBC was dragged down into this populist abyss in a desperate effort to compete with FoxBusiness when it launched October 2007. more…

CNBC’s Jane Wells posted an entertaining parable sent to her explaining how the stock market works:

Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers seeing that there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10 and, as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy monkeys at $20 each. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so scarce it was an effort to even find a monkey, let alone catch it! The man now announced that he would buy monkeys at $50 each! However, since he had to go to the city on some business, his assistant would now buy on behalf of him. more…

There’s a reason Larry Kudlow is a star on CNBC: he sparks debate by taking hard lines on market issues, or really any issues. Like last year during an entertainment industry riff when he declared that all rap music is misogyny and violence “up and down the line.” This example helps explain the problem with a man who’s an otherwise well-informed market journalist: he’s not on the ground level. What does Larry Kudlow, a man who surely takes Town Cars from one controlled environment to another, know about rap music? Or about the deal-to-deal level of the housing market?

In a written piece today, Kudlow made some good points about how the mainstream media is missing the housing bottom. more…

Berkshire Hathaway CEO and market oracle Warren Buffett Told CNBC today that U.S. inflation is “exploding” … such a statement from a credible source makes a great headline. Will it surpass the Fed decision (see our previous story from today on Fed rate decision and discussion of inflation) in it’s market influence? Hasn’t so far, but markets sometimes take a few days to digest data. Markets were rather tame after the Fed announcement today, since they’d priced in the Fed statement expectation rather accurately.

The S&P Case Shiller April 2008 report of existing home sales showed record 15.3% price declines averaged across 20 major cities (see table below), with all 20 cities declining. Home prices are now down 17.8% from 2006 and close to 2004 levels.

Though it wasn’t in today’s Case Shiller report, CNBC’s Diana Olick highlighted some critical long-term data from Chip Case (who is the “Case” half of Case Shiller) about percentage price increases from March 2000 to March 2008: “[During this eight-year period] Every single market was in the positive, except Detroit, which has its own, non-housing bubble issues. Miami prices are still up 109 percent from 2000. Los Angeles home prices are still up 107 percent from 2000. Granted, many people bought homes from 2004-2006, and those folks have lost in the game. But the average span of the average American holding onto a home is 6-8 years, which means that the bulk of Americans have still done well with their single largest investment, despite all the price drops.” more…

Former Fed Chairman Alan Greenspan has been out in full force this week defending his monetary policies amidst growing criticism that his decision to keep the Fed Funds Rate at 1% from July 1, 2003 through June 30, 2004. He wrote a rebuttal to critics in the Financial Times, and then did an interview with CNBC. Some say it’s hard to believe a guy who led with: “If we can get forecasts right 60% of the time, then we’re doing extraordinarily well.” After all, if we could ascribe the same success metric to our own jobs, we’d all be wildly successful.

However, Greenspan has actually made some valid points in recent days. Regarding rates, he correctly points out that long-term rates were low during the home price run-up and would have spurred housing prices anyway. Regarding a fix for the housing crisis, he said that we should consider a solution similar to the Treasury’s Resolution Trust Corporation which ran from 1989 to 1995 as a way to help unwind the S&L crisis — the RTC was set up to liquidate assets of troubled savings and loan associations that had been declared insolvent by the Office of Thrift Supervision. more…

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. more…