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Sunday, March 08, 2009 11:48 PM

Famous Last Words Revisited

Mish Moved to MishTalk.Com Click to Visit.

In "Famous Last Words" (repeated below for convenience) I took a look at a 10 point CNBC Slideshow On Famous Last Words.

Somehow I had not yet seen this video where Jon Stewart on the DailyShow takes a look at some "advice" given on CNBC.

In case you have not seen this yet, please take a look at CNBC Gives Financial Advice.

Daily Show Partial Transcript

March 11: Jim Cramer "Bear Stearns is Fine"

Bear Stearns went under six days later

October 4, 2007: Jim Cramer "Bank of America is now the cheapest and the best and I have to admit that as much as I like Wachovia I think Bank of America is going to $60 in a heartbeat."

Today, Bank of America trades under $4

December 5, 2007: Charlie Gasparino "Obviously AIG is not going bankrupt. The insurance company is well capitalized."

Federal Bailout Money for AIG
$85 Billion in September 2008
$37.8 Billion more in October 2008
$30 Billion March 2009

October 31, 2007: Jim Cramer "You should be buying things and accept that they are overvalued. But accept that they are going to keep going higher. I know that sounds irresponsible, but that's how you make money"

DOW 13,930

February 1, 2008: Jim Cramer "That's why the market won't quit no matter how poorly actual companies are doing".

DOW 12,743

April 16, 2008: Kudlow & Company "The worst of this subprime business is over."

DOW 12,619

June 13, 2008 Jim Cramer: "Very simply I believe that means it's time to buy, buy, buy."

DOW 12,307

November 4, 2008 Guy Adami, Fast Money: "The fundamentals are coming back into play. People are starting to get their confidence back"

DOW 9,625

March 4, 2009 Jon Stewart: "Wow. If I had only followed CNBC's advice, I'd have a million dollars. .... Provided I started with $100 million."

That is an incredibly funny video. There is much much more.

What follows is a repeat of "Famous Last Words"

Inquiring minds are investigating the 10 point CNBC Slideshow On Famous Last Words of 2008 boneheaded comments. Here are some of my favorites.

#3: Erin Callan

"Categorically no."

Lehman Brothers CFO Erin Callan responding on March 18, 2008, to the question as to whether the firm would be the next to go out of business.

Callan was ousted from her job in June. In September, Lehman Brothers filed for Chapter 11 bankruptcy protection.

#4 Ben Bernanke

"I expect there will be some failures” of smaller banks. “Among the largest banks, the capital ratios remain good and I don't anticipate any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system."

—Federal Reserve Chairman Ben Bernanke in February 2008.

#6 Dick Bove

"Lehman is a takeover target…I upgrade to buy".

—Dick Bove, banking analyst at Ladenburg Thalmann on Aug. 21, 2008.

Within three weeks, Lehman Brothers filed for bankruptcy. The stock went from $14 a share to $0.

#7 Chris Dodd

"Fannie and Freddie are very solid institutions. They have more-than-adequate capital. They have access to capital markets."

—Chris Dodd, chairman of the Senate Banking Committee, July 14, 2008.

In September, the U.S. government seized control of both Fannie Mae and Freddie Mac, concerned about their mounting losses.

#10 Bernie Madoff

"In today's regulatory environment, it's virtually impossible to violate rules...it's impossible for a violation to go undetected, and certainly not for a considerable period of time."
Two Bonus Picks

#11 Shelia Bair FDIC Chairman (March CNN Money Interview)

"This very challenging credit environment will likely continue through most of 2008, but will clear out towards the end of the year."

Sheila Bair Real Clear Markets Interview October 6, 2008

"we actually think our industry reserves will be sufficient. I think it’s important for the public to understand we are with the government – we’re backed by the full faith and credit of the United States government. ..... Well, you know, I think overall, banks are very well capitalized. They have – yes, they have some stresses in their outset quality, some a lot. But they also have very strong reserves; they’ve been very aggressive about getting reserves. So I really think the balance sheets are strong, they’re in a good position to what it is."

#12 Peter Schiff (Peter Schiff Was Wrong)

Schiff asks "But what if it [the US$] keeps falling? What if it's down 5% next week? And 5% the week after that? And then what if it drops 10%? ...."

"There is extraordinary excitement in commodities." Little Book of Bull Moves in Bear Markets, "Hot Stuff" on page 105.

Little Book of Bull Moves in Bear Markets, page 41:

"I'm rather fond of the word decoupling, in fact, because it fits two of my favorite analogies. The first is that America is no longer the engine of economic growth but the caboose. [The second] When China divorces us, the Chinese will keep 100% of their property and their factories, use their products themselves, and enjoy a dramatically improved lifestyle."

What Happened? Commodities crashed, foreign equities crashed, the US$ soared. There was no decoupling. Instead there was coupling with a vengeance.


Several people noted that CNBC did not include any of their own silly comments. Here are some notable quotes including one from CNBC's Jim Cramer.

#13 Eugene Peroni Jr. of Advisors Asset Management

January 1,2008
Market Monitors Predict Stock Activity For 2008
Eugene Peroni, Jr. of Advisors Asset Management tops the bulls. He sees the Dow climging all the way to 15,200 and then closing the year just below the 15,000 mark. Gene regards healthcare, infrastructure, and energy as this year's best sectors. And among mutual funds, he likes large cap growth funds. Gene isn't phased by current bearish sentiment, in fact he sees that as part of the recipe for upward surprises in the stock market.

#14 Mark Leibovit of VRTrader.com

Nearly as bullish is Mark Leibovit of VRTrader.com. He sees the Dow ending the year only 100 points lower than Peroni.

#15 Joseph Cohen of Goldman Sachs

Abby Joseph Cohen of Goldman Sachs tied for the honors as last year's "top bull." While she's in the middle of the pack now, she's still bullish calling for a Dow close of 14,750. Cohen sees a new economic equilibrium emerging, leading to higher stock prices. But she also hints it could be a rough year for bonds.

#16 Jim Cramer

Aguust 2008: CNBC's Jim Cramer announces that the market has hit bottom

click on chart for sharper image

"I am indeed sticking my neck out right here, right now, declaring emphatically that I believe the market will not revisit the panicked lows it hit on July 15. and I think anyone out there who’s waiting for that low to be breached is in for a big disappointment and [they’re] missing a great deal of upside. Stop waiting, [and] buy the next dip because I think it might be the last big one."

Mike "Mish" Shedlock
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