Editor’s Note: In this series of articles, we include important or interesting videoclips with brief comments. Our Web Software does not permit embedding of the clips into our articles. So we shall have to be content to include the links to the actual videoclips. We are very happy with the tremendous response from readers to this series of articles. We thank them sincerely and profusely.
This is an article that expresses our personal opinions about comments made on Television and in Print. It is NOT intended to provide any investment advice of any type whatsoever. No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Investing is a serious matter and all investment decisions should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerances.
Last month, we wrote “Wednesday June 10 was the day of the 10-Year Treasury Auction. This was a big event and CNBC devoted a great deal of coverage to this auction. Predictably, the coverage was about how long maturity US Treasuries were a terrible asset class to own because the deluge of debt offerings from the Treasury Department.”
We asked then “whether CNBC’s anti-Treasury hype on June 10 would end up signaling a peak in long maturity Treasury Rates.” So far, the answer to this question is a resounding YES.
This past week, the Treasury Market went on a bull run despite having to digest issuance of over $100 billion of Treasuries in 4 different auctions. As CNBC has told us ad nasueam, such issuance should make Treasuries a terrible investment. What is the reality? CNBC has been totally wrong. Since the peak of yields on June 10, long term Treasuries have been exploding in price with yields dropping to two-month lows.
Yet, CNBC Anchors persist in their anti-Treasuries jihad. For example, CNBC’s Erin Burnett “reported” on Monday July 6 that “most people say avoid Treasuries like a plague”. Like a plague? A poet would call Treasuries investment gems of “the purest ray serene”. But, Erin Burnett compares the purest and safest securities in the world to the plague? Well, now you understand why we used the phrase anti-Treasury “jihad” in our August 2008 article Are CNBC Anchors On A Mission Against US Treasuries?
This week, we feature the following videoclips:
- A Three-Part Interview with David Rosenberg on CNBC Squawk Box on Tuesday, July 7
- Richard Bernstein with CNBC’s Maria Bartiromo on Friday, July 10
- Ken Chenault, CEO of American Express, with CNBC’s Erin Burnett on Wednesday, July 8
- Word On The Street – CNBC Fast Money opening segment on Wednesday, July 8
- Technical Analyst Phil Roth with CNBC’s Mark Haines on Tuesday, July 7
- Jordan Kotick of Barclays with CNBC’s Michelle Caruso Cabrera on Thursday, July 9
- Mark Hulbert, Editor of Hulbert’s Financial Digest, on Squawk Box on Monday, July 6
- Famous Oil Investor T. Boone Pickens on CNBC Squawk Box on Tuesday, July 7
1. David Rosenberg on Squawk Box – Tuesday July 7 – 6:01 am
Mr. Rosenberg used to be the Chief North American Economist at Merrill Lynch for many years. Now, he is the chief economist and strategist at Gluskin Sheff + Associates, a Canadian Firm.
We have featured Mr. Rosenberg’s views several times because we have found him to be prescient about the US Economy and the US Treasury Market. We have no relationship whatsoever with Mr. Rosenberg or his firm. We look forward to hearing his views on networks like CNBC. When we feel his views should be widely read, we bring his TV interviews to the attention of our readers.
He was interviewed at different times during the 6:00 – 7:00 am hour by Joseph Kernan and Carl Quintannia of CNBC Squawk Box. The clips can be found at:
- Economic Outlook – 6:01 am – His outlook on the US economy
- Market Outlook – 6;35 am – “U.S. stock market may have run ahead of fundamentals”
- Inflation: A Real Threat? – 6:52 am – “inflation is years away”
As we reported last week, Mr. Rosenberg has been the biggest Bull on US Treasuries on Wall Street. Yet, in one hour of interviewing him, the Squawk anchors did not find the time or inclination to ask his views on US Treasuries. Hmmmm!
2. Richard Bernstein, Ex-Merrill Strategist, with Maria Bartiromo – Friday, July 10 – 4;15 pm
Richard Bernstein left Merrill Lynch recently to start his own firm Richard Bernstein Capital Management. He and his ex-colleague David Rosenberg have been prescient during the past 2-3 years in predicting the course of markets. So we were happy to hear his views and to share these with our readers. This is a must-watch clip for a serious investor. Some excerpts are below:
- Bernstein pointed out that the so-called “green shoots” like oil prices are actually a tax on the consumer and end up in slowing the economy.
- Maria Bartiromo interjected to say that “You know, I have never believed in green shoots, because we talk to people on the ground, people running businesses, they say it is a very tough environment right now and it remains that way”.
- Maria then turns the topic to emerging markets and says “the stimulus package in China is working better than the stimulus package in the United States”.
- Bernstein offers a different point of view saying “what people haven’t thought of though, is that China’s response in large part to this weakness in the global economy has been to build more productive capability in their economy, more production, that is the last thing the global economy needs,, we have massive global oversupply right now …China is just going to produce more on top of that, that is not going to make things all that much better”.
- Then Maria Bartiromo asks Bernstein about various sectors of the stock market and he responds.
- At the end, Maria asks “Real quick, do you like commodities?”
- Bernstein says “I do not like commodities. I think they have been over-played.‘
As we have reported, Maria Bartiromo has brought us interviews with people like Peter Fischer of Black Rock who have been bullish on Treasuries. But, Maria cannot bring herself to ask a guest whether they like Treasuries and she simply cannot ever say on TV that Treasuries should be bought by viewers. She seems so afraid to do so.
In contrast, it was Erin Burnett who took a break from her anti-Treasury jihad on May 28, 2009 to demand an answer from Pimco’s Bill Gross to her question “whether there is any rate right now that would entice you into buying treasuries?”. That was really gutsy of Erin Burnett. She forced Bill Gross to respond and he answered “3.7% – 4%”. He proved to be dead right. The 3.99% level on June 10 has proved to be the peak in ten-year interest rates so far.
Maria Bartiromo simply cannot summon such guts. Is being gutsy, like being jihadi, also an attribute of the young?
3. One-on-One with Ken Chenault – Chairman/CEO of American Express with Erin Burnett – Wednesday, July 8 – 2;02 pm
As the CEO of American Express, Ken Chenault is ideally positioned to tell us about the state of the American Consumer. He did and the stock market sold off. We recommend readers watch this clip.
4. Word on the Street – CNBC Fast Money opening segment – Wednesday, July 8, 5:02 pm
This week’s 10-year US Treasury Auction was phenomenally successful. Global investors lined up to buy this issue of 10-year Treasuries at 3.36%. Naturally, most of CNBC merely paid lip service to this major event. But not Tim Seymour, a Fast Money Trader.
- Seymour said (at minute 11;29 of the clip) “the demand for this thing, the bid-cover ratio was the highest they have seen in 15 years of this auction and this 10-year auction- this is the auction. So it was an extraordinary event…an exclamation point I think on economic weakness.”
If we hoped that Karen Finerman would finally see the light, we were disappointed. Ms. Finerman paid lip service to the auction and said “long term, I still hold to the thesis (that issuance would create inflation and treasury prices would fall)”
In passing, we must say that the scene between Melissa Lee and Karen Finerman was weirdly interesting. Karen Finerman has claimed to be double-short US Treasuries and so the auction must have been personally painful to her. So Melissa Lee tried to soften the blow. It felt strange to watch a much younger Melissa Lee try so obviously to comfort a mature, successful hedge fund manager like Karen Finerman. Most hedge fund managers we know are tough cookies who can handle a bad trade. But not Karen Finerman or so thinks Melissa Lee. As we said, watch this interaction to see what we mean.
5. Reading The Market Technicals – Phil Roth and Scott Redler with Mark Haines & Erin Burnettt – Tuesday, July 7 – 10:31 am
It seems that almost every week, we see a CNBC anchor almost abuse an expert guest for expressing opinions that go against the convictions of that CNBC anchor. This week it was Mark Haines, a veteran CNBC anchor.
Mark Haines has claimed that he called the bottom of the stock market in March and Erin Burnett, his co-anchor, has termed this bottom as the Haines bottom.
This is a good clip with thoughts from respected technical people like Roth and Redler until minute 04:30 of the 05:50 minute clip. Then it turns nasty. Mark Haines forgot that he is merely an anchor, a watcher and pretended to be an expert technician. He then lost his cool and began arguing with Phil Roth. Finally, he shut up Roth by saying ” it is after all my program”.
We find the behavior of Mark Haines objectionable on the following counts:
- May be we are wrong, but we thought it was a CNBC program and CNBC allowed Mr. Haines to anchor it. This is different from it being a “Haines” program. We hope and believe that CNBC produces this program for the benefit of the viewers and it is the viewers who make the program profitable for CNBC. We the viewers watch CNBC to learn from widely respected experts like Phil Roth and not opinionated watchers like Mark Haines.
- Mr. Haines has a history with CNBC. He was the anchor of Squawk Box during what we consider to be the Year of Shame of CNBC – the Tech Bubble of late 1999 – early 2000. As we recall, it was Mr. Haines who used to jeer at respected experts who tried to advise viewers to sell technology stocks. As a result, the viewers lost a huge portion of the their 401Ks and IRAs.
- The behavior of Mark Haines towards Phil Roth on July 7, 2009 was reminiscent of the 1999-2000 Mark Haines. He jeered at an expert who tried to make a case that stocks could go to new lows, a view that has been articulated on CNBC by other technical experts like Paul Desmond of Lowry’s. Clearly, Mark Haines does not watch CNBC shows like Closing Bell.
- Finally, the behavior of Mark Haines brought to mind shades of the “Henry Blodget & Wall Street Analyst” integrity issue. When Mark Haines called the March 9 bottom, did he put his own money to work in equity mutual funds? That would show whether Mr. Haines believed in his own call or not.
- Readers might recall that Wall Street Analysts used to write glowing reports about stocks without believing in the stocks themselves or risking their own monies in those stocks. They merely trumpeted the stocks in their reports to generate investment banking revenues for their firms.
- We do think that Mr. Haines believed in his March bottom call. So it is an not an integrity issue for him. But, if Mr. Haines did NOT invest his own money in stock mutual funds at that time, then it would mean that he was taking no personal risks in making that call. He was merely exhorting the viewers of “his” program to take risks with their own 401Ks and IRAs. It probably made for good ratings and increased the visibility of Mark Haines. It also generated ratings and revenue for CNBC.
- The question is whether it was ethical for Mr. Haines to trumpet his bottom call without taking any personal risks or without disclosing to viewers that he was not investing his own monies in support of his own call? CNBC Management should think seriously about this issue.
- In any case, We urge CNBC to stop opinionated anchors like Mr. Haines from making their own investment calls IF they do not put their own money behind that call. It is the job of the journalistic anchors to question & get opinions from investing experts and NOT make investment calls themselves. Investing is a risk-taker’s art and not a watcher’s hobby.
6. Summer Corrective Season – Jordan Kotick with Michelle Caruso Cabrera – Thursday, July 9 – 3:45 pm
We have featured clips of Jordan Kotick in prior articles because he has been right in his calls. In this clip, he expresses his negative views of the Brazil and India stock markets as well as commodities like copper. This is a must watch for any investor in emerging markets.
7. Mark Hulbert, Editor of the Hulbert Financial Digest, with Joe Kernan – Monday, July 6 – 8:15 am
The Hulbert Financial Digest is a widely read investment newsletter which covers market sentiment from its unique vantage point. In this excellent clip, Mark Hulbert discusses his views for the summer and the rest of 2009. This is a must-watch clip and we commend Joe Kernan for his deft management of this interview.
8. Pickens on Securing Energy Independence on Squawk Box – Tuesday, July 7 – 7:40 am
Mr. T. Boone Pickens is probably the most widely known and highly successful Oil investor in the USA. We try to listen whenever we get an opportunity to hear his views. Mr. Pickens expresses his deep concern about China getting access to Canada’s oil reserves. Listen to his views on this topic at minute 08;11 of this clip.
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