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CNBC Blasted for Inadequate Investigative Reporting

Trend: The search for villains in the financial crisis continues with leading financial network CNBC being criticized for lack of journalistic integrity in reporting.

Jim Cramer took a verbal beating from Jon Stewart for his role in not exposing the falsehoods that has caused so much asset destruction among investors in the financial crisis. Stewart dropped his comedic facade and became deadly serious as he questioned the integrity of Cramer and CNBC.

Stewart did not question the role of CNBC's advertisers in influencing their frequent acceptable of falsehoods from key players.

Link: Jim Cramer On "Daily Show": Jon Stewart Hits Hard (VIDEO).

Stewart said he and Cramer are both snake-oil salesman, only "The Daily Show" is labeled as such. He claimed CNBC shirked its journalistic duty by believing corporate lies, rather than being an investigative "powerful tool of illumination." And he alleged CNBC was ultimately in bed with the businesses it covered - that regular people's stocks and 401Ks were "capitalizing on your adventure."

For his part, Cramer disagreed with Stewart on a few points, but mostly acknowledged that he could have done a better job foreseeing the economic collapse: "We all should have seen it more."

Cramer said CNBC was "fair game" to the criticism and acknowledged the network was perhaps overeager to believe the information it was fed from corporations.

"I, too, like you, want to have a successful show," said Cramer, defending his methods on "Mad Money." He later added: "Should we have been constantly pointing out the mistakes that were made? Absolutely. I truly wish we had done more."

Cramer insisted he was devoted to revealing corporate "shenanigans," to which Stewart retorted: "It's easy to get on this after the fact."

At one point, Cramer sounded the reformed sinner, responding to Stewart's plea for more levelheaded, honest commentary: "How about I try that?" said Cramer. "I'll do that."

By the end, the two-segment interview went far beyond its allotted time. Comedy Central said the on-air version would be cut by about eight minutes, though the entire interview would be available unedited on ComedyCentral.com on Friday.

Interview Part 1:

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Are Government Bailouts Wise?

Trend: Ongoing government bailouts of large institutions weaken the long-term growth prospects of the U.S. economy.

John Mauldin's Outside the Box features an important HCM Market Letter, written by Michael Lewitt. In the following excerpts, Lewitt describes the bitter medicine that the U.S. must endure to re-create sustainable economic growth based on savings rather than debt. The underlying question is: Can our current political leaders make decisions that aren't just short-term fixes?

Link: Reality Bites - John Mauldin's Outside the Box - InvestorsInsight Publishing.

The problem with bailouts is that you have to know what you're bailing out. But neither the U.S. government nor anybody else is capable of estimating the ultimate cost of bailing out such corporate giants as Citigroup, AIG, General Motors, Fannie Mae, and Freddie Mac (and the list goes on). There are two reasons for this. First, on a stand-alone basis, these companies are opaque and indecipherable entities. Financial innovation left transparency in the dust. Wall Street devoted much of its intellectual and political capital to concealing the risks it was creating. This concealment was deliberate; products needed to be priced inefficiently to produce profits. Second, these companies are integral parts of a networked global economy; as such, their value is completely dependent on the overall health of that network. Unless the network can be restored to health, these assets will remain severely devalued. Right now, the network is very sick. When a system is allowed to hide risk for so long, it is ill-equipped to manage that risk when it finally emerges from the shadows.

The Obama Administration is facing a near-impossible task trying to bail the U.S. economy out of the muck of years of ill-begotten economic policies. The biggest challenge facing policymakers is not short-term recovery, however. Eventually, stimulus is likely to arrest the forces of economic collapse and stabilize matters – at least temporarily. But the real problem is sowing the seeds of long-term, sustainable, organic economic growth. This is really the crux of the policy challenge. The United States in the midst of the worst economic downturn in 80 years as the result of a panoply of extremely poor economic policy choices. Economist Roger W. Garrison draws an important distinction between "healthy economic growth, which is saving-induced (and hence sustainable), and artificial booms, which are policy-induced (and hence unsustainable). In other words, monetary policy that kept interest rates low for an extended period of time, tax policy that favored debt over equity, regulatory policy that allowed financial institutions to operate opaquely, and social policy that pushed home ownership regardless of affordability, all combined to create artificial economic demand that could only be financed with debt because the savings (i.e. equity) to purchase them did not exist.