Thoughts on Jim Cramer vs. Jon Stewart

There is a serious feud ongoing between Jon Stewart and Jim Cramer.

Stewart, as you probably know, used the Daily Show and other venues to slam the financial TV networks in general and CNBC specifically. The Mad Money host, who has become famous by instructing viewers to buy and sell individual stocks in a carnival barker style, came under especially harsh criticism.

Cramer then did a media tour to defend himself; you can see a video summarizing that here and read a column Cramer wrote on the subject here. Stewart responded; you can see that here. Cramer's primary argument in all this is that Stewart is taking video snippets out of context to make him look bad -- something a comedian or a blogger could do to any pundit. Cramer points out that Stewart never mentions the fact that he urged people to withdraw their money from the stock market October 2008, when the Dow was still around 10,000. He did do that, it's true.

Cramer does deserve credit for (1) ending his market boosterism and Wall Street CEO ego-stroking before the rest of TV's financial news community did the same, and (2) apologizing for some horrifically bad stock picks (he endorsed Wachovia stock after then-CEO Bob Steel came on Mad Money and pimped the bank). But ultimately that's all tangential: What Cramer really needs to do is stop making ordinary people believe they can game the stock market on a day to day basis. A massive majority of the buying and selling done on Wall Street is done by banks and massive institutions with all the resources in the world at their disposal. Joe Sixpack and his 1,000 shares of Coca-Cola are just grease for the gears. If Joe invests his money long-term in low-risk index funds and mutual funds, he might ride out the market's fluctuations. If he tries to move that Coca-Cola at just the right time, and buy Johnson & Johnson at just the right time, he's going to get eaten alive.

Jim Cramer can defend himself all he wants. But his modus operandi is still problematic: he sends amateurs hurtling into a professional's game.

Generals Open Up About Their Own PTSD

It's about damn time. CNN spoke with two one-stars who are doing their part to destigmatize this oh-so-natural consequence of, you know, war and stuff:

Brig. General Gary S. Patton and Gen. Carter Ham have both sought counseling for the emotional trauma of their time in the Iraq war. "One of our soldiers in that unit, Spec. Robert Unruh, took a gunshot wound to the torso, I was involved in medevacing him off the battlefield. And in a short period of time, he died before my eyes," Patton told CNN in an exclusive interview. "That's a memory [that] will stay with me the rest of my life." Ham was the commander in Mosul when a suicide bomber blew up a mess tent. Twenty-two people died.

As bad as all the death and destruction is, imagine being the general whose day-to-day decisions put the rank and file in harm's way.

The interview's a start, but until these generals do a whole lot more to send the message down the chain of command that mental health is as important as physical health, we're going to keep seeing our soldiers come back unsalvageable.

Sticking Together

Without fussing over the details in this particular post (you can go here for that), the Employee Free Choice Act would almost certainly make it easier for unions to organize new workplaces.  That's why unions support it and management doesn't.  Wal-Mart management, for example, especially hates it.  But I sure never expected this, as reported by Ezra Klein:

The more impressive strike came, however, earlier this morning, when Citibank downgraded Wal-Mart's stock from a "buy" to a "hold" on fears that passage of EFCA could force the company to unionize which would in turn decrease shareholder profits as more of the company's worth was distributed to employees.

....It's hard to recall another time when an analyst actually downgraded a stock on fears of legislation that few expect will even pass. Indeed, many on the left are arguing that this is more about creating stock market panic that will convince senators to vote against EFCA than about accurately pricing Wal-Mart's stock. "When I see upgrades to the stocks of Wal-Mart's already-unionized competitors (grocery stores like Safeway who will gain back market share if easier unionization results in higher Wal-Mart labor costs) specifically pegged to the specter of EFCA, then I'll admit that Citi is engaged in good-faith prognosticating here," e-mails Josh Bivens at the Economic Policy Institute. "Otherwise, not so much."

The malefactors of great wealth are really sticking together on this, aren't they?  Considering Citibank's recent record, though, I think we could all be forgiven for taking their view on this with a grain of salt.

Michael Steele, the new chairman of the Republican National Committee, has promised to take his party "beyond cutting edge." But Joe Rospars, the man behind the Obama campaign's incredibly successful new media outreach, said that the RNC's current internet strategy is "all smoke and mirrors marketing."

On Tuesday, Rospars took part in a question-and-answer session about the impact of technology on politics hosted by the left-leaning think tank NDN. Rospars dinged the Republicans' much-criticized request for a proposal (PDF) to redesign its website, laughing that his company, Blue State Digital, certainly won't be competing for the business. (Lefty BSD probably wouldn't respond to the RFP anyway, of course, but Rospars brought it up out of the blue—he was obviously referring to the widespread mockery it had already received.) He criticized the GOP's email list, boasting that the Obama campaign's 13-million-strong list was developed in an "organic" way. "We didn't purchase lists and just add people to our email list," he said. "The point of having a big email list isn't just to say you have a big email list. The RNC says they have a however big email list, but the point is to actually have relationships with people so they open the message, they listen to what you're saying, and they're willing to do something," he said.

Rospars suggested that it's a mistake to see the use of social networking technologies and new media as ends in themselves—in other words, using tools like twitter and facebook are ways of mobilizing a following, but they don't ensure you'll get one. Without adopting "the ethos of building an organization from the bottom-up," the GOP will have trouble catching up, Rospars said.

Meanwhile, Rospars is doing his best to make sure the GOP doesn't catch up. He says that of the 100 best ideas he and his team came up with during the campaign, they only used about 15. He's won't be talking about those in public. He doesn't want to "give anybody any ideas."

Too bad for Michael Steele.

In Which I Agree With Yuval Levin

Hey, it was bound to happen sometime.  And of course, I only agree with him halfway.  But he's right when he says this about President Obama's decision to allow much broader federal funding of embryonic stem cell research:

What you think of his policy depends on what you think of the moral status of embryos....That legitimate dispute underlies the stem cell debate. But that is not the ground on which the president made his case yesterday. He argued that to deny free rein to stem cell science is to ignore and reject the promise of science as such. In a barely concealed swipe at his predecessor, he pledged that his administration would "make scientific decisions based on facts, not ideology."

The executive order Obama signed omits any mention of ethical debate....The issue, he suggested, is a matter of science, not politics.

Politics is politics, and presidents always frame their decisions in ways they think will be the most acceptable to the most people.  But this annoyed me when I read Obama's statement yesterday, and I don't blame Levin for being annoyed either.  If you think an embryo is a human life — and lots of people do — then you're going to be opposed to embryo research.  If, like me, you don't, then you're not likely to have any objection.  But although science can inform that debate, it can't resolve it.  Ethics and ideology will always be front and center.

I guess I wouldn't care too much about this except that Obama also issued a memo yesterday about eliminating political interference with science.  That's important, and it applies to important subjects like global warming, habitat protection, GM foods, Plan B, and other things.  But its impact is diluted if we pretend that everything is a scientific issue.  There's nothing wrong with admitting that both Bush's stem cell decision and Obama's have strong moral and ideological dimensions, and denying it tends to reduce our credibility when we insist on the underlying science of other issues that really are mostly scientific.  In this case, honesty really is the best policy.

The Future of Abortion Providers

Today's feminists need to blog less and work more. If women want reproductive choice to remain more than rhetoric, they'd better stop assuming these clinics will be there when they need them. Because like priests and nuns, abortion doctors are not reproducing. From NYT:

"We worry about that a lot," said Sally Burgess, executive director of the Hope clinic, who is also chairwoman of the National Abortion Federation, the main professional support group for abortion providers. "Younger women have always had access to abortion care, they don’t fully appreciate the battle that was fought to have it available to them. And more important, I don’t think they know how precarious the option is at this point, even with Obama's election."..."What I observe for women in their 20s and 30s — there are fewer who really have the fire in the belly for this,” she said. At 50, Ms. Burgess is the youngest member of the Hope clinic’s leadership team, which includes Ms. Baker; Debbie Wiehardt, 57, the office supervisor; and the two doctors performing abortions (the only men on the 30-person staff), who are both in their 60s. A recent survey of 273 abortion clinics published in the journal Contraception found that 64 percent of their doctors were at least 50 years old, and 62 percent were men."

It's dangerous and gloomy. The pay sucks. Lots of people think you're a murderer. And, yeah, you might get shot. But you young chicks maybe need to go the Northern Exposure route, sending folks to med school in exchange for a few years running an abortion clinic. That feminist fire in the belly? I gotta say: Pole-dancing, walking around half-naked, posting drunk photos on Facebook, and blogging about your sex lives ain't exactly what we previous generations thought feminism was. We thought it was about taking it to the streets.

Harsh, you say? Uninformed? OK. Tell me exactly what today's feminists are doing for the struggle. Besides posting disses against old chicks like me. You got that covered.

Bernanke on Leverage

The title of this post is mostly whimsy: in his speech about financial reform today, Ben Bernanke barely even mentioned leverage as a problem.  In fact, his only use of the word (in the financial sense, anyway) came toward the end when he vaguely suggested that a new government agency might be set up to, among other things, assess the potential for "broad-based increases in financial leverage...to increase systemic risks."

Since I think massive abuse of leverage is at the heart of what turned an ordinary asset bubble into a global meltdown, I'm disappointed that he didn't spend more time on this.  But on a related matter, he did say this:

However, there is some evidence that capital standards, accounting rules, and other regulations have made the financial sector excessively procyclical — that is, they lead financial institutions to ease credit in booms and tighten credit in downturns more than is justified by changes in the creditworthiness of borrowers, thereby intensifying cyclical changes.

For example, capital regulations require that banks' capital ratios meet or exceed fixed minimum standards for the bank to be considered safe and sound by regulators. Because banks typically find raising capital to be difficult in economic downturns or periods of financial stress, their best means of boosting their regulatory capital ratios during difficult periods may be to reduce new lending, perhaps more so than is justified by the credit environment. We should review capital regulations to ensure that they are appropriately forward-looking, and that capital is allowed to serve its intended role as a buffer — one built up during good times and drawn down during bad times in a manner consistent with safety and soundness.

Capital ratios basically regulate the amount of leverage a bank is allowed to take on, and what Bernanke is suggesting here is that in good times, when animal spirits are high and anyone with a pulse is offered a no-down loan, capital ratios should be increased, thus reducing bank lending and keeping leverage within reasonable bounds.  In bad times, when animal spirits are moribund and deleveraging shuts down the credit pipeline, capital ratios should be decreased, allowing banks to loan more money.

This has always struck me as a good idea.  But Bernanke doesn't say how he thinks it should be done.  Would a board of some kind make these decisions twice a quarter, the way the Fed does with interest rates?  Or would there be some kind of automatic mechanism involved?  If the former, what confidence do we have that they'd really be willing to take the punch bowl away during boom times?  The Fed sure wasn't willing to do so during the 2002-07 expansion.  Overall, this is a good suggestion, but it could bear some fleshing out.

If you want to have your heart break, I mean really break into a million jagged pieces, read WaPo's hideous piece on parents who forget their kids in cars where they die horribly while Mom types 200 feet away.

Think it could never happen to you? Before I had kids, I would have been quite sure my answer would be not just no, but HELL no! But pizza chefs have done it. Rocket scientists have done it. People who spent years and hundreds of thousands of dollars on foreign adoptions have done it. Two kids later, I have to admit—yeah, it cudda happened to me. Thank god they're too big and too noisy now for that particular mistake. But God knows which other mistakes could easily befall even the best of us. So why are bloodthirsty DAs going after parents?

We're not talking here about parents who intentionally leave kids in cars so they can get their hair done and shop unencumbered. They are criminals and deserve punishment. We're talking about people who, almost entirely, had some change in the routines of their over-stressed lives and simply, honestly, forget their child was in the car. The piece is extremely well done and well researched, so check it out and resolve to look into every back seat you pass this summer. But prosecuting these folks for murder? It's not like there's any deterrent factor at play here. Good thing juries are composed of humans and not ambitious lawyers trying to make names for themselves.

Here's all it took for one jury to do the right thing. The attorney didn't put the mom on the stand because she refused to grovel and whimper in public. He played the 911 tape instead.

The tape is unendurable. Mostly, you hear a woman's voice, tense but precise, explaining to a police dispatcher what she is seeing. Initially, there's nothing in the background. Then Balfour howls at the top of her lungs, "OH, MY GOD, NOOOO!"

Then, for a few seconds, nothing.

Then a deafening shriek: "NO, NO, PLEASE, NO!!!"

Three more seconds, then:

"PLEASE, GOD, NO, PLEASE!!!"

What is happening is that Balfour [the mom] is administering CPR. At that moment, she recalls, she felt like two people occupying one body: Lyn, the crisply efficient certified combat lifesaver, and Lyn, the incompetent mother who would never again know happiness. Breathe, compress, breathe, compress. Each time that she came up for air, she lost it. Then, back to the patient.

After hearing this tape, the jury deliberated for all of 90 minutes, including time for lunch. The not-guilty verdict was unanimous.

These parents have suffered enough.

35 Counties Account for 50% of Foreclosures

USA Today points out that, last year, just 32 counties accounted for one half of all foreclosures in the United States. Those counties are outlined in red below. Even among them, there are some areas that are worse than others: "Eight counties in Arizona, California, Florida and Nevada were the source of about a quarter of the nation's foreclosures last year."


And yet, California is, on average, the happiest state in the nation. Weird how things work. (H/T The Electoral Map)

More Losses

Here's your chart of the day, courtesy of McClatchy:

America's five largest banks, which already have received $145 billion in taxpayer bailout dollars, still face potentially catastrophic losses from exotic investments if economic conditions substantially worsen, their latest financial reports show.

Citibank, Bank of America, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase reported that their "current" net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31. Buried in end-of-the-year regulatory reports that McClatchy has reviewed, the figures reflect a jump of 49 percent in just 90 days.

Meanwhile, the Wall Street Journal reports that U.S. officials are "examining what fresh steps they might need to take to stabilize [Citibank] if its problems mount, according to people familiar with the matter."  This is in case Citi "takes a sudden turn for the worse," which, they say hearteningly, "they aren't expecting."  Good to hear.