CNBC paired noted bears Nouriel Roubini and Nassim Nicholas Taleb yesterday in what could have been a very good arrangement. But rather than fully explore their arguments on why the financial system is fundamentally screwed, the segment devolved into bear-bashing and nearsightedness.
Here’s Michelle Caruso-Cabrera, not able to contain her disdain for the bearish Roubini and Taleb.
“When I hear that Bill Gates and Michael Dell are lining up to listen to these guys in Davos, to me that screams of ‘market bottom’—like, peak of the hysteria.”
It’s interesting to see Caruso-Cabrera try to delegitimize these guys early on in the interview. The touts regularly featured on the network don’t seem to come in for such tough treatment very often.
Here’s another “what the heck?” moment: CNBC’s Dennis Kneale gets riled up when Taleb criticizes Wall Street bonuses as a big part of the economic and financial problems:
Compensation is the smallest part of the problem. Compensation doesn’t amount to one-millionth of the losses that we’ve taken on here. Compensation isn’t the problem.
Taleb slaps that down easily:
That’s not true…because the system was built…because bankers had an incentive to take hidden risk (that made the system) extremely fragile to black swans
Meanwhile, Roben Farzad of BusinessWeek, when not blathering about “cocktail parties,” keeps badgering Taleb about how his talk about the failures of the financial system isn’t “actionable” as an investment.
How do I sublimate that into action today? If I’m terrified; if I’m not getting anything on bond yields. Where do you put the money?
Taleb answers “I’m not here to give immediate investment advice, and Farzad interrupts in a further attempt to delegitimize him:
But you’re here to proffer doom and gloom…
To be fair, Taleb wasn’t answering the question, but anchor Bill Griffeth was able to step in and steer the conversation fairly and gets results.
Still, Josh Marshall has it about right on this display:
These two guys are talking about a deep structural crisis in the world economy. And these CNBC yahoos can’t stop asking for stock tips. Really surreal.
I’m watching it again now. This is a seminal piece of video. You have to see it. I’m not sure I’ve seen anything that captures — albeit unintentionally — the vast disconnect over what is happening today in the US economy.
UPDATE: Paul Krugman pulls out a hilarious Monty Python sketch after watching this gross CNBC segment.
Not fair, Ryan. I gave them the very real-world example of parents looking to sock away money for a newborn w/ an 18-years-to-college horizon. I was not asking for stock tips; they could have, for example, directed me to Treasury bonds or gold for capital protection. My query was open-ended. To the extent that I get asked this 'what do I do?' quite a bit lately -- what with banks failing, savings yields diving -- I simply saw nothing wrong with putting it out there. In other words,' the system is broken, the sky is falling. All granted and duly noted, sirs. But I still have to attend to my finances, both near and long term. So what do I do?'
Thanks
Roben
#1 Posted by Roben Farzad, CJR on Tue 10 Feb 2009 at 06:22 PM
I understand that, and it's a legitimate question, Roben, but it's how it came about.
I'm taking that as part of the whole segment, which was too dismissive of these guys, including your throwaway line "But you’re here to proffer doom and gloom…"
Taleb was trying to finish his answer to a previous question, when you interrupted him twice. When pressed again to explain how to "sublimate that into action", he said he wasn't there to give investment advice.
Anyway, readers can judge for themselves, starting about 7:00 into the video.
#2 Posted by Ryan Chittum, CJR on Wed 11 Feb 2009 at 11:43 AM
Ryan, I challenge bulls and bears alike. Understand that I'm not there to facilitate Barnes & Noble open mic night or pull a Wayne's World 'we're not worthy' ... I'd expect you to call me out for it if I did. Nouriel only reluctantly told us at the end that he was 200% in cash; Taleb the investor / investment adviser has outperformed like mad in this financial crisis. True, I should have given them due props at the outset, and maybe given the vindicated Taleb more time to hawk the bestseller. But my question, however much avoided, was absolutely fair. Thank you for your audit.
#3 Posted by Roben Farzad, CJR on Wed 11 Feb 2009 at 01:28 PM
Roben,
We love that you read us, and thank you for your comments. It strikes me, though, that the "bull and bear" rhetoric is no longer operative at this point. We are way beyond that now. And to call these two individuals "bears" misses the point. These are the ones who saw and tried to warn about the structural flaws in the system--including, I'm sorry, the critical compensation issue (Dennis, they made those CDOs for their health?)--that created the need for desperate investment advice in the first place. To put them on the same level with the run-of-the-mill "bull" carnival barkers we see on certain networks is the definition of false balance.
And no, the question wasn't pertinent. And, as they were trying to explain, it won't be until the structural problems are fixed.
#4 Posted by Dean Starkman, CJR on Wed 11 Feb 2009 at 03:38 PM
Mr. Farzad,
To be clear, Taleb did eventually answer your question, saying that he has his money in cash right now.
But you still haven't addressed everyone's concerns here: why not let actual experts address structural problems and explain them at length? Why resort to making them give you sound-byte "actionable" items. Isn't there value to non-actionable discourse, even on commercial television?
Best,
Aaron Street
#5 Posted by Aaron Street, CJR on Wed 11 Feb 2009 at 07:41 PM