Thank You Maria Bartiromo For The Larry Fink Interviews


We tend to write about CNBC because we believe that the vast majority of our readers are investors and regularly watch CNBC. We receive comments from our readers about our CNBC related articles and some of these articles have made it to our blog’s 10 Most Popular Articles List. 

The single best comment was from an avid reader last week – “CNBC is a great channel; it is only bad when they let their anchors think…..they should only report and they should do interviews – they are great at it”.

CNBC reporters are truly terrific. Their franchise reporter Rick, the REF, Santelli is now an icon of American honesty and candor (see our article “Kudos to Rick Santelli, The REF of CNBC & Shame On You, Robert Gibbs, White House Press Secretary” – February 21, 2008). His economic counterpart and sparring partner “Professor” Steve Liesman is a great asset to viewers like us. He is extremely well informed, well connected and reports economic news in a clear, level headed manner. His passion is no less than that of Rick Santelli and he gives as good as he gets in his duels with Rick Santelli. 

Phil LeBeau, who covers the Auto sector for CNBC, is exceptional in his insight and honesty. Having lived in metro Detroit (a long time ago), we are very impressed at how Mr. LeBeau pierces through the fog of insularity that covers Detroit to bring us the true story behind the story.  Diana Olick, CNBC’s Housing reporter, is a treasure. This lady is amazing in her knowledge, insight and her ability to take on professional hedge fund managers when they voice opinions that she disagrees with. In our opinion, CNBC should give Ms. Olick more air time to share her insights on housing, the most critical sector of the American economy today.

We also have a high degree of respect for CNBC’s professional investor anchors, Jim Cramer and Larry Kudlow. Our reader, we believe, was referring to of CNBC’s lineup of Journalist Anchors. We ourselves have been critical of these folks and their ability to impose their biases on their shows (See our article “Are CNBC Anchors On A Mission Against US Treasuries? – A Viewer’s Perspectives” – August 23, 2008 – http://www.cinemarasik.com/2008/08/19/are-cnbc-anchors-on-a-mission-against-us-treasuries–a-viewers-perpsectives.aspx ).

Our reader is spot on about the comment about great interviews on CNBC. We have a case in point – Maria Bartiromo’s interview of Larry Fink, Chairman of BlackRock on February 18, 2009.

In our opinion, Larry Fink has been the most prophetic investor for the past two years. There have been gurus and professors like Robert Schiller of Yale and Nouriel Roubini of NYU who have been brilliant in forecasting the bust of the credit bubble and its impact on the global economy. But, these gurus do not mange complex Wall Street Firms or hundreds of billions of dollars of investor money. Larry Fink does both and he has done it brilliantly.

On October 4, 2007, he told Maria Bartiromo “The credit problem is just beginning..” and went on to add that the “rally in equity and credit is based on the mistaken belief that the worst problems in credit were behind us.” Ten days later on October 14, 2007, the Dow reached its high and began its decline that continues to this day. How prophetic was Larry Fink? (Watch this interview at www.cnbc.com/id/15840232?video=544842887&play=1.)

Maria interviewed Larry Fink again on Tuesday, September 16, 2008. In this interview, he told Maria that we could see a 4% 30-year mortgage rate. You can see this interview at www.cnbc.com/id/15840232?video=858246212&play=1. 

We highlighted this interview in our article on September 20, 2008 titled
“Why do we watch CNBC? How do we “safely” watch CNBC?” (http://www.cinemarasik.com/2008/09/19/why-do-we-watch-cnbc-how-do-we-safely-watch-cnbc.aspx . 

In that article, we wrote
 
that, under the Larry Fink scenario, “the 30-year Treasury yield would have to drop to around 3% from its current level of 4.40%. This would mean a rise of about 40% for the price of the 30-year Treasury Zero Coupon Strip”. In less than three months, by mid December 2008, the yield on the 30-Year treasury fell to a low of 2.50% and, in 2008, the Treasury Zero coupon strips had their best year since 1986.

This week, Larry Fink argued that the key to recovery in equity markets is residential housing. Near the end of a 12 minute interview, Maria Bartiromo asked him “So, what is going to take for people to get less risk-averse?”. She meant the professional allocators of risk capital or the large Institutional Investors.

Larry Fink replied “We got into this mess because of problems of residential housing. We got to get out of this mess in terms of stabilizing residential housing. It is going to take months and quarters until we realize this and I don’t expect any real rally in equity markets until we start seeing that…. Stability in our housing market will build confidence with the consumer and through that confidence in the consumer, we can see confidence in the allocators of capital….”.

Larry Fink admonishes Maria in this interview that “low rates are going to be important..”. May be, he thinks as we do that Maria Bartiromo, like all CNBC Journalist Anchors, hates low treasury yields.

When Larry Fink speaks, every investor should listen. We always do. You can watch this interview at www.cnbc.com/id/15840232?video=1039222549&play=1.


We have been critical of Maria in the past and have (correctly) called her the CNBC cheerleader for GLG2 (global liquidity global growth story – otherwise known as the credit bubble) and for leading the CNBC jihad against US Treasuries. But, frankly, all her sins have to be forgiven because she brought us Larry Fink interviews regularly and at critical market junctures.

Thank you Maria Bartiromo! Your interviews are one key reason why we watch CNBC.


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