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On CNBC, The Numbers May Be Different, But the Tune Never Changes

This is an excerpt from the Pro Trader Weekly Federal Revenues Report. Federal Revenues Pro Trader subscribers (or Professional Edition), click here to download complete report in pdf format.

One of the benefits of being aboard ship in the middle of the Atlantic Ocean is that I don’t stay online watching the market all day. The satellite charges aboard ship are insane. So I’ve been reduced to watching CNBC for market updates. While it is painful, I even turn on the sound occasionally to listen to the words emanating from the flapping jaws on the screen.

It’s the first I’ve watched any extended CNBC chunks blowing by since 2003, when I swore off watching long form infomercials. It’s fun to watch with the sound off. You notice the mannerisms of the talking heads as they feign authoritativeness, or let you know that they are about to tell you something really, really important. A I do not recognize many of the faces I see on the screen now, but the message is exactly the same as I remember from 2000-2002. “Don’t panic! One thing you should not do is sell. There are opportunities! There are good values! Look for the opportunities. Be selective!”

When they do have a bearish guest, it’s usually only for purposes of ridicule. They dare not do that with David Stockman because they know that they do not have the intellectual firepower to match wits or facts with him, but the old regulars were always fair game. I wonder if it’s still the same 3 guys, David Tice, Peter Schiff, and Bill Fleckenstein. Whenever they were on, it seemed to always be at an intermediate term bottom. CNBC’s producers are great contrarian market timers. Invite a big bear for an interview? Bottom!

For Big Media in general, apparently there’s no such thing as a bear market, or at least until CNBC declares an “official bear market” when the broad market averages are already down 20% and your stocks are down 40%. Then the message will be, “It’s too late to sell.” Only when the market is down 35-40%, the talking heads will start getting nervous and the titles will read, “Is it time to sell?” That’s when it’s time to start looking for “opportunities” to cover your shorts.

The actual numbers may differ, but the tune never changes.

And by the way, just who or what is the official organization that declared that only when a market is down 20% is it a bear market. The International Board of Stock Markets – IBSM?

Say that fast three times.

And who first came up with the idea that you should never panic at the beginning of a bear market? Seems to me that that would be the best time to “panic.” Actually the ones who are panicking are the deer frozen in the headlight talking heads. Calm, thoughtful and decisive people are not panicking. They’ve been selling for the past 18 months. And they sure haven’t been listening to CNBC for advice. But it’s entertaining, if you enjoy throwing stuff at your TV.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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