Financial News Pundits Are Chock Full ‘O Crap

After two weeks of the media gushing over Michael Jackson, they’re back to the standard formula: Bring on fresh faces who can talk fast, talk loud, sound like an expert, and let ‘em loose. The reality is that most of these “experts” have no idea what they’re talking about. There are often vague descriptions listed under their name or no credentials whatsoever. “Relationship expert”, “Consumer behavior expert”, “Blogger”. They cite statistics like median, mean, average, without even knowing what the underlying data set looks like or what the implications of their assertions are.

Who are these people? And why are they on TV?

The sad reality is that while local news coverage focuses almost exclusively on murder, fire and car chases with some weather teasers sprinkled in, cable news networks focus almost exclusively on panels of pundits debating the same topics in polarized fashion in a dog fight of stupidity.

I flipped by Fox recently and they had this panel of “Financial Experts”. They have some email that comes in and it reads something to the effect of

“Hi, I’m $30,000 in debt, I just lost my job, I have very little savings/emergency fund to get by and I’m afflicted with this particular disorder which is very expensive to treat. I have no health insurance. My medical bills are stacking up and I don’t know what to do. Help!”

After listening to a particular commentator tout “Flexible Spending Accounts” as the solution to the country’s health crisis in the prior segment, it was evident he was chomping at the bit to jump on the bandwagon again. He didn’t seem to have anything else to talk about, he was really pumped over these FSAs. The host read the question aloud and looked around at the panel, probably thinking to himself, “This guy’s totally screwed; I’d love to hear what these experts have to say now”. Nobody else on the panel had any advice for the guy, there’s obviously no clear answer for him. Well, jumpy commentator #1 hops right into Flexible Spending Accounts again.

He says, “OK, what you need to do is start contributing the maximum amount to your FSA account…” and he spews out the same log of crap he just spewed out in the prior segment.

Is this guy kidding?

He’s advising a guy with no funds and no income to go start up a Flex Spending Account? From where, thin air? The host looked at him in amazement, but was too embarrassed to call him out and moved on to the next email. I felt dumber for having watched that segment. But I didn’t flip the channel, this was just too annoying to ignore.

Next, they take this same panel of boneheads and do a rapid-fire stock pick segment. They have each person pick their favorite stock and give a quick reason why. This is the most formulaic, insipid segment that virtually every network runs. Unfortunately, many of these panelists have no clue what they’re talking about. They memorized a sound bite they heard on Cramer or read in the Wall Street Journal and go on the cable news channels spewing out some nonsensical qualitative reason to buy a stock. There’s no credibility or historical accountability whatsoever to what they say. They just keep bringin’ em back. Someone tuning in for the first time has no idea if this guy has ever run a mutual fund, is an industry analyst for a major firm, or whether he’s columnist for some blog and somehow made it onto TV. The worst part is that some retail investors actually act on this advice!

This is the type of thing that just makes me want to vomit.

While Cramer’s been vilified and is becoming less and less relevant, at least the guy beat his peers and beat the market in unique fashion for years on end and he has a staff doing research for him. While he’s obviously lost plenty of money for people acting on his advice, and his format lends itself to poor investing decisions for probably millions of retail investors (very compelling monologue, gushing CEO interview, closing with lightning round which is completely useless), at least the guy’s done something in the field! He’s earned his stripes. He occasionally takes blame for a bad call and sacrificed himself to Jon Stewart. Some of these other boneheads are just sock puppets spewing out someone else’s idea a week after the smart money already acted on it.

What’s your favorite pundit story?

Subscribe by RSS Subscribe by Email