Dan's Papers - April 1, 2009

The universal pat on the back given to Jon Stewart for trashing Jim Cramer on TV the other day is very undeserved in my opinion. Cramer, whose show "Mad Money" is on CNBC, is hardly your sober financial adviser giving straight talk advice. He screams and shouts, works up a sweat and throws things as he tells you what's coming down or going up on Wall Street. If you take him seriously, that's your problem. Stewart, who should be and is often outraged by incompetents letting you down in a pinch, has gone after the wrong target.

I don't know if there is a RIGHT target when it comes to financial advice. It's been famously said that a dozen monkeys, punching buttons in a cage at random can get the same outcome as a dozen stock market experts. And The New York Times recently published a study that showed that when the Dow was at 1,400, 95% of our serious financial advisors said buy, there are great opportunities, when the Dow was at 1,200, 95% of them said buy, there are great opportunities, when the Dow was at 1,000, 95% said buy, there are great opportunities and so forth and so on all the way down to today when, at 700, 95% percent of them still breathlessly say exactly the same thing.

Cramer is just another one of them. Except he throws things, honks bicycle horns and rips his clothes off.

What seems to have been lost in the simplistic savaging of Cramer by Stewart is the cold truth that 99.9% of everybody in America - from our tearful Alan Greenspan on down to the humblest of cleaning ladies who got a $510,000 mortgage to buy a $500,000 house one year ago and even further down to Stewart himself - I betcha, believed this could go on forever.

I know exactly one person, a modest behind the scenes personal friend with vast wealth in the stock market, who more than a year ago waved goodbye to all his financial advisors, took everything he owned and put it into treasuries, which are the equivalent of cash. He told me at the time. He said, "This can't go on forever." And he told me he advised his grown children to do what he did and they didn't. And, in December 2007, he advised me to do that too, and I didn't either.

Did this person have some secret knowledge that nobody else had? I don't know. But he told me this: We build nothing, buy everything overseas, run up deficits, spend like bandits, drive real estate prices so high nobody can afford the houses, own gas-guzzlers that need outrageously priced fuel that we don't make, pay for two wars, spare ourselves no luxury and think this can go on forever.

That was why he took all his money and put it into 0% interest bearing instruments. Cash itself.

When Stewart lit into "Brownie" of FEMA after Katrina, the man was deserving of such a trashing. To do the same to Cramer is an unworthy trashing because it masks the hard truth in this case - that Americans suffered a misguided human optimism that government failed to temper. Or, as Cramer put it, spreading gloom and doom is not good TV.

Isn't America all about good TV? You know, this Depression is exciting. Look at the ratings.

You know, with the Dow now hovering at 700, I think there may be some real opportunities in this market.