Brawl Street: Jon Stewart v Jim Cramer

It is without doubt, the news topic of the moment - the GFC. Along with the humour (see my past blogs here and here), the sorrow, the pessimism and the optimism, comes the blame.

I've already looked How culture has shaped the GFC but lately I've been watching the Jon Stewart v Jim Cramer saga unfold.

I'll declare my position right now on this one (after joining a healthy Facebook status commentary on the topic): I've worked in the funds management industry and dealt with the press enough to know what they both don't want you to know - nobody is doing the sort of analysis you would expect on every company all the time. They pick one or two to focus on and that's it. Combined with the fact that companies are using things like off-balance sheet entities to hide debt and liabilities, and you realise that even if analysts try to perform their jobs, it is largely irrelevant because they are missing the icebergs altogether anyway. It's like asking a ship's captain to navigate around iceberg's using only google map images from last year. You might by chance make it through (probably statistically more than you'd think) but sooner or later you are going to come unstuck.

Funnily enough, when someone does call it out ahead of the storm, it seems everyone feels safer to stay with the herd and deem it heresy. As both Mr Friedman (Obama’s Ball and Chain ) and Michael Lewis (The End of Wall Street's Boom) state in their articles, Meredith Whitney has become what Bethany McLean was for the Enron saga.

This is the sort of problem the regulators need to focus on. I know everyone is upset with the casino that is the financial markets, but that isn't the problem it really looks like. The issue is trust. If the dealer at a blackjack table can't trust that the $100 put on the table actually is that person's $100 to gamble, the whole thing goes out the window.

The tough part to reconcile is that these people often don't think they are lying. They really have drunk their own cool-aid and believe the lies - I suspect a variant on Joseph Goebbels oft quoted statement "If you repeat a lie often enough, people will believe it."

If you haven't checked it out yet, see the clips below in the order you should watch them. Part 2 below has the real meat and I think Jon really hits the mark about 3mins 30secs in:

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posted by Lee Gale @ 3:34 AM,


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