April 3, 2001

I call this the Mickey Mouse Club(s) Staring CNBC because I believe CNBC is a joke, and I call it clubs because CNBC isn't the only joke when it comes to Wall Street and investments.

The lead mouseketeer, Ron Insana, told Larry King Live that he did not give out investment advice, that he was there to report the news and that was it. That may be true, however, you see something completely different when you look at the whole picture behind CNBC. The reporters on CNBC are about a third of what's put out on CNBC, that is, advertisements, economists, analysts, fund managers, and so-called market gurus are given tons of time to air their opinions and bull-shit lines. And all these individuals can keep the shit rolling off their tongues without ever having to worry about being truly challenged by CNBC's staff.

I can still remember, guest after guest on CNBC touting internet stocks and fund managers buying those internet stocks with other people's money. Stocks that were extremely overvalued based on historical standards. Now, after the meltdown, do you see CNBC holding those individuals mostly responsible, and no it was not the day traders fault? No. A once in a blue moon comment may be made, but much more criticism is warranted, if not, the problem will only resurface again and again.

Many Wall Street investment banks, mutual fund companies, and analysts should be scorned and torn apart, their stupidity should go down in history and be documented by news sources such as CNBC. But it won't, nothing will happen to those mostly responsible because it is not in CNBC's best interests.

CNBC gives Wall Street a platform to air its opinions without no accountability. That is, they can say whatever they want to and no matter how wrong they are, it makes little difference to CNBC. Well, what's wrong with that, nothing, if they did not make $billions off of their stupid advice. Wall Street must be accountable for wrong advice. Doctors are accountable when they are wrong, why not Wall Street professionals?

When I think about it though, maybe the problem with CNBC is the fact that most of the reporters don't know much about what they report on. Mark Haines once asked, "Who cares about revenue growth?" Of course, no one replied. I'll reply Mark, I do. Without revenue growth the only way earnings can grow is by cutting expenses and therefore earnings growth would be limited which would be bad from an investment point of view. Got it Mark.

CNBC says profit from watching them even though many of the so-called experts CNBC has on their shows are technicians, those who look at graphs and the such to predict the direction of stocks and markets, the ones who decide on support levels, you know, the levels that have been broken about 30 times or so on NASDAQ. Earnings drive stocks and earnings are fundamental investment data not technical data.

Like I said earlier, there are many Mickey Mouse Clubs when it comes to Wall Street and investments. Since the Federal Reserve controls fiscal policy for the US they also play a key roll with Wall Street. The politicians who are our only link to the Federal Reserve are another group of Mickey Mouse characters. Look at them now, as markets all over the world meltdown, they do nothing. Cisco has lost as much in itself, close to 1/2 a trillion dollars in market cap which was the total loss in market cap in ALL stocks in the crash of 1987. The politicians are acting like this is just another correction when in actuality this is a major crash, much worst then the crash of 1987.

One last tid-bit of information: when the Fed cuts rates on the money it loans out, where does the money the Fed loans out come from? It comes from money the Federal Reserve borrowed. $500 billion of our total National Debt is money borrowed by the Federal Reserve. Moreover, when the Fed cuts interest rates, many say that brings on investment in businesses which inturn will stimulate the economy. Wrong, yes, that's what the rich want you to believe, but the rich know that in America's infancy that's what businesses initially did: "If be build it we can get someone to buy it." The rich found out that is not true. Without consumers, businesses die.

When the Fed cuts what stimulates the economy is consumers and as consumers buy, businesses then start to invest. This is the reason why Japan has zero interest rates and it still has not "stimulated" its economy (The Japan stock market is still 50% of what it was 10 years ago). The Japanese are very conservative, as a whole they are savers, not spenders. Even though interest rates are zero, the Japanese prefer to save vs. spend.

Eventually, America will have the same problem, but not for the same reason. That is, America's Federal Reserve will be as weak as Japan's. Not because Americans start saving more, but because they become maxed out with their borrowing. Already, here in Silicon Valley, many home owners have borrowed heavily against their equity in their homes. Yes, many here would love to borrow even more like the Fed wants them to, but banks will loan out only so much against a home's value. Granted, some banks will loan out more, but overall, it gets harder and harder to loan out money, even at a lower interest rate, when those who are borrowing the money have a debt to equity ratio that's rising. America's borrowing or their debt to equity ratios have been rising for years now.