Hi again Scott,

I find it hard to sympathise with people who brought stocks solely on the recommendations of Cramer – ultimately, they have to take some responsibility for not actually doing any real research.

However, if Cramer knew that Bear Sterns was bankrupt and was telling people to buy – I see that as true mis-information. In that case he is culpable.

However, I guess I’m just making value judgments in some sense here 🙂

Im not arguing over whether or not Cramer gave good or bad advice on one particular day over one particular stock. My “greater point” is that they advertise themselves as being on the side of Common Joe but do NOT behave accordingly by discussing the gaming of the system (and thus making Common Joe aware of ALL the risks of trading). I believe this can be described as “mis-advertising”.

Complicate with their silence? I don’t know, they don’t have a responsibility to do anything. If they were blatantly mis-advertising things I can see what is wrong with them – but if they simply didn’t address facts then I don’t see an issue.

If they didn’t address facts and then investors didn’t go looking for them it is still the investors fault that they threw their money down the toilet.

What about the concept of being complicate with their silence? By remaining silent on the matter they perpetuate the myth that the system is fair and equitable. This is NOT a case of them “giving no information”, its a case of them behaving in accordance with a false “reality”.

But you can’t really criticise someone for not giving information – if there was such a market for the information why didn’t someone push out and provide it?

Ultimately, I only blame CNBC if they actually mislead people blatently – there is a world of difference between giving no information and giving mis-information.

Check out the interview with Cramer from 2006 (it appears the original, unedited version has been taken down). His statements are startling to say the least.

They aren’t at fault if they aren’t providing information – I think we should only criticise them if they provided mis-information. As a result, I have to agree with Rauparaha here

The shadow banking system was a big part of the financial crisis, but I don’t think it is fair to say that business channels ignore its existence. Perhaps you mean that they failed to properly explore the risk inherent in the large holdings of CDOs that many firms had. In that case I would say that most people underestimated that risk and CNBC were no more at fault than anyone else.

Stewart’s main point was that CNBC knows that a shadow capital system exists alongside the system accessible and known to Common Joe. CNBC is complicit in supporting this system by not acknowledging its existence and not adjusting it’s behavior/advice accordingly. The risk to Common Joe, who watches CNBC for stock picking advice, is therefore greater than it otherwise would be.

I do not think that he should be liable in any financial sense of the world – the damage to his reputation is sufficient enough.

But before the crisis I believe that people had some faith in him – and to some degree he may have abused this. Us discussing it is part of the process of optimally readjusting his reputational capital 😉