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March 17, 2009 - Freedomain Radio - Stefan Molyneux

17:41

1304 True News 24: Jon Stewart, Jim Cramer and the Truth

Jim Cramer is only the symptom. The truth about the cause.

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	Hi everybody, it's Stefan Molyneux from Freedom Aid Radio.
	This is a brief analysis of the debate this week.
	It is mid-March 2009 between Jon Stewart and Cosmo, wait, Jim Kramer, who runs a show called Man Money on MSNBC. And...
	It was an interesting debate.
	I mean, how sad is it that a comedian has to be the conscience of free market capitalism while the guy who is considered a representative of free market capitalism is a sleazy scumbag in rolled up sleeves?
	Jim Cramer says, and there's lots about the debate, I'll just talk about a few points that I think are of interest.
	Kramer says, well, the reason that I said that people should buy or stay in particular stocks was because the CEOs came on my show and they lied to me.
	How shocking and unbelievable that CEOs in scumbag state-supported industries like The modern mafia banksters should come on and lie.
	Of course, this would mean that he expected truth and plain dealing in the financial circuit.
	And there has been an interview that's shown up On YouTube, I'll try and put the links off to your right here, where he says, when he was a hedge fund manager,
	he said, Research in Motions, the maker of BlackBerry, this is a quote from Jim Cramer from months before this debacle, he said, A lot of times when I was short at my hedge fund and I was positioned short, meaning I needed it down, the stock price, I would create a level of activity beforehand that Could drive the futures.
	It doesn't take much money.
	Or if I were long and I wanted to make things a little bit rosy, I would go in and take a bunch of stocks and make sure they are higher.
	Maybe commit 5 million in capital and I could affect it.
	Now you need maybe 10 million in capital to knock the stuff down, but it's a fun game.
	And it's a lucrative game. So what he's talking about here, basically, is you can take a short or long position on a stock.
	In other words, a long position means you expect it to go up and you'll make money.
	If it goes up, a short position means you expect it to go down and you'll make money if it goes down.
	And what they do then, of course, is if I go short on a stock, I'll sell a bunch of stock, which causes the price to go down, and then I make some money.
	Or if I'm long on a stock, I will buy a bunch of stock, sending buy signals out, And then when the stock price goes up, I'll cash in my position and make a couple of points on the transaction, which can be a serious amount of cash.
	Now, it's illegal, right, to buy and sell stocks with the purpose merely of affecting the stock price, not because you have any intrinsic belief in the value or non-value of the stock.
	It's illegal, and like most things that are illegal, that are not based on the initiation of force, it is virtually impossible to prove, and of course the government has no interest and incentive in attempting to prove these things.
	So it says you can't foment.
	That's a violation. You can't create yourself an impression that the stock is down.
	But you do it anyway, because the SEC doesn't understand it.
	That's the only sense that I would say that it is illegal, but a hedge fund that is not up a lot really has to do a lot to save itself.
	This is blatantly illegal, but when you have six days and your company may be in doubt because you were down, I think it's really important to foment.
	If I were one of these guys, foment an impression that research in motion isn't any good.
	Get people talking about it as if something is wrong with RIM, Kramer advises.
	Then you would call the Wall Street Journal and talk to the Bozo reporter on Research in Motion and you would feed that Palm has got a killer it is going to give.
	I think a competition.
	And if you are not doing it, maybe you shouldn't be in the game.
	What's important when you are in that hedge fund mode is to not do anything that is remotely truthful, because the truth is so against your view.
	It is important to create a new truth, to develop a fiction.
	You can't take any chances.
	And it goes on and on, and of course it's just completely disgusting and vile.
	And I don't blame him a bit, really.
	I'll talk about why. The guy who's interviewing says, well, what about the stock fundamentals?
	He says, ah, the mechanics are much more important than the fundamentals.
	Who cares about the fundamentals?
	Research in motion just blew out the quarter.
	Look what people can do. That's the fabulous thing.
	The great thing about the market is it has nothing to do with the actual stocks.
	Maybe two weeks from now, the buyers will come to their senses and realize that everything they heard was a lie.
	But then again, Fannie Mae lied about their earnings for $6 billion, so it's just fiction and fiction and fiction.
	It's important for people to realize that the way that the market really works is to have that nexus of hit the brokerage houses with a series of orders that can push it down, leak it to the press, and get it on CNBC. That's also very important.
	Do you see? And then you'll have a vicious cycle down.
	It's a pretty good game. It can be played for a percent or two.
	CNBC, I think that's the...
	Sorry, that's the... Network that he's on.
	So what he's basically saying is you take a position on a stock and then you lie about it and you use the media to create the perception that something is happening and that a whole bunch of sheeple investors will go herding back and forth based on just watching the stock price with no idea about the actual fundamentals in the stock.
	And this is how this massive sloshing tidal wave of money goes back and forth within an economy, within the stock market.
	I have no beef with the stock market.
	It's an essential free market institution, but I just want to point out a few things that I think are very interesting.
	First of all, Kramer, this fellow, says that the CEOs lied to him, and he's shocked, shocked and appalled that this happened.
	Of course, he knows, as a fund manager for many years, that that's all that they do, is lie, for the most part.
	And so the idea that he was shocked that people lie.
	But what's interesting is in the interview with Jon Stewart, he actually says, but these guys have been friends of mine for 20 years or more.
	Right. And that is a very telling statement.
	Because the way it works, you see, is that if you're in the inside of one of these companies that is Bear Stearns or whatever, let's just say Bear Stearns, that's going down, what you want to do is to unload your stock as quickly as As possible.
	Now, of course, when you start unloading your stock, it sends a sell signal, which causes these sheeple investors to go back and forth and so on, or to start selling.
	So what you need is you need someone to generate a non-sell, like a non-sell signal or even a buy signal, and that, of course, is Jim Cramer's job.
	So he's got friends at Bear Stearns, and again, this is all just what he knows.
	We know he's got friends, but the rest of this is just speculation, right?
	But I think pretty good speculation.
	He's got friends inside of Bear Stearns who want to unload their stock because they know that it's a dog and it's going to go down the tubes.
	And so they call up their friend of 20 years of Jim Cramer saying, listen, dude, you know, we're going to start selling and so there's going to be a sell signal.
	We need you to countermand that in your show and tell people not to sell or hopefully even to buy so that they have someone to sell their stock too, right?
	Because if there are a few people who want to buy the stock that want to sell the stock, the stock obviously will go down.
	So when he says, I have friends for 20 years who ran these organizations, and when they were selling, I told people to buy, that is a sick, twisted, disgusting pile of friendship right there, right?
	Where he's just doing them a favor and creating, at least withholding a sell market or hopefully creating some buyers by lying to people in his show.
	So that his friends can offload their stocks without the price tanking and make a couple of hundred mil in the transaction because of their good friend, Mr.
	Kramer. So that's the fundamental reality that is almost certainly what occurred, right?
	So the idea he's saying, well, they lied to me, it's shocking.
	I mean, this is just too ridiculous for words.
	And the man, for the amount of wealth that he has destroyed...
	You know, if there was a god in layers of hell, he would be down in one of these sub-sub-sub-sub-sub-sub-basements, but all that we can know is that his conscience will get him, if it hasn't already.
	So that's sort of that, because if you don't understand the stock market, and I mean, I'm no genius or expert in it, but I definitely was in play, the company that I co-founded was in play in the stock market, and I got to see a lot of this vile stuff up close.
	It's what kind of drove me out of the business world, at least as an entrepreneur in many ways.
	Because when we started the company, we went around And got funding from people who knew us, who knew the business.
	We could sit down and explain it to them, and we got investors, just private investors.
	We didn't go, obviously, to a bank or to the stock market to begin with.
	And those people made a good 3,000 return on investment, because I and the others in the company were pretty good at generating wealth and providing value to our customers.
	And then we got bought out, and we ended up listed on the stock exchange, and I saw all of this vile shit that goes on in this supercharged stock market.
	This is a true news segment that you might want to look a little further back.
	Just look for supercharged one-word stock market for an understanding of why this occurs.
	But basically, There's two reasons why people like Jim Cramer and the fantasy rape of the uneducated investor occurs, the lies.
	It's for two reasons that this occurs, neither of which have a single goddamn thing to do with the free market whatsoever, of course.
	And the first reason that people are able to make this kind of dipshit money off people is because there's way too much fiat money.
	Well, any fiat money is way too much fiat money, but there's way too much liquidity in the system.
	When you have governments creating Hundreds of millions or trillions of dollars in any fiscal quarter or year, that money just starts charging around the stock market looking for instant profits.
	So it completely corrupts the long-term value of investments.
	So that's sort of the one issue.
	It's just a huge amount of money looking for anywhere that it can go to make a percentage point or two because everybody knows that the fiat money is going to collapse over time.
	So there's a feeding frenzy.
	People aren't storing nuts for the winter.
	They're just gorging themselves.
	So that's number one. Number two is, well, why is all this money in the stock market?
	Well, because it's herded there by the guns of the government.
	So, for instance, I can either hand over a certain amount of money to the government, they'll take it from me by force, I can put it into the stock market, right?
	Which is like, basically, the mafia guy comes and says he's going to trash my car unless I invest in his hedge fund.
	That is the relationship that I have with my RRSP, or in the US it's 401k, or other countries have different names for it, which is, you know, put your money into the goddamn stock market, or we'll take it from you by force.
	So, basically, this is one of the reasons.
	This is the second reason why the stock market It's so hysterical and why the stock market has been so corrupted by fiat money and forcing people to invest at gunpoint or taking their money.
	And most people would go to invest.
	And you can't put the money in a bank account.
	You can't buy gold.
	You have to put it into the stock market.
	And that's the payoff. That the government gives to people in return for the support, right?
	I mean, the Bank of America, I think, gave $4.1 million in campaign contributions and got $65 billion in government investment.
	Sigh. Well, a bailout, really.
	But that's a pretty good investment in evil.
	Because there's two kinds of people in the stock market, fundamentally.
	The stock market is originally designed to help worthwhile companies raise money from knowledgeable investors, right?
	So, companies that can provide a good return on investment by, you know, they need to open a second plant and they can't get enough money from people they know.
	They will go out to the stock market, they will make presentations to investors and institutional investors And those people will then study the fundamentals of the company and the market and will invest judiciously, and that's all healthy, that's all good, there's some level of risk and all that, but that's all very good, in my opinion.
	That's totally fine, it's all free market, it's voluntary, no guns involved, and that, of course, is a very good thing.
	On the other hand, There is this supercharged stock market, which is basically, instead of it being a healthy weightlifter, it's some no-neck muscle-bound monster on roid rage, ripping off doors and punching out machines.
	Because what happens there, instead of There being knowledgeable investors who are going into something or at least having a representative going in to invest in a company with knowledge of the industry and of all the other things involved in being a wise and prudent investor.
	You have these evil sycophantic lying-ass parasites called speculators.
	And in a free market institution, speculators are dartboard throwers and minor con artists and who really gives a rat's ass.
	But in a supercharged stock market with fiat money and money herded in from bullied and cowed and violently aggressed against individuals, all of that money flowing into the stock market, speculation takes over from investment.
	The speculators, you know, bad money drives out good, speculators drive out good.
	The investors and everything becomes a con game and a shell game and a money manipulation and a reality manipulation.
	And that is a genuine tragedy because good companies go unfunded and bad companies go through these incredibly wildly oscillating swings of being jerked around like a baby zebra between the teeth of these lions and jackals.
	So, I think it's really, really important to understand that Jim Cramer is just an ugly, boy-like-looking specimen who is a mere symptom of the problem.
	I mean, you can't have good communism.
	Every time you get a dictatorship, you're going to get a Stalin.
	It's inevitable. Good men don't rise to positions of evil power.
	And in the same way, whenever you have fiat currency, particularly run by the government, and you have people forced at gunpoint to invest against their will, you're going to end up with specimens like Jim Cramer.
	And that, of course, is something that Jon Stewart, for all of his eloquence, intelligence and research, is not going to be able to address that.
	In any particular speech or interview with anyone representing Wall Street.
	But I think that's the important thing to understand.
	There's nothing to do with the free market.
	We have a fascistic sector of the economy called the investment and banking industry.
	It's nominal private ownership but public control.
	And expected, of course, the contempt for the regulators is common throughout the financial industry.
	I mean, of course, they're not going to catch something as subtle as spreading rumors to drive up and down stock prices, which would not work in a free market because the investors would not take...
	They would be knowledgeable about the industry they were investing in or the company they were investing in, so they would not take buy and sell signals as a stampede.
	So... This would not occur in the free market, but because we have fiat currency and people's money is herded in like a bunch of refugees at gunpoint into the stock market, we have this ridiculous, massive speculation, bubbles bursting and all this kind of stuff.
	And sure, Jim Cramer is not going to talk about it.
	Of course he's not going to talk about it.
	Because that's not what he's paid for.
	Financial communicators are paid to find willing dupes in the larger sheeple investor market or speculator market who are going to buy and sell based on panic and fear, based on buy and greed and sell signals and all this and that, who aren't knowledgeable about the industries, don't know about the fundamentals, haven't read the company's books, do not have a clue what's going on.
	And those financial communicators are all about...
	Either propping up falling stocks so that those on the inside can sell them, or creating an artificial demand through lies, brash, ridiculous confidence, intimidation, and so on, creating a market for these stocks that those on the inside want to sell.
	That's really important, right?
	If you've ever had those sleazebags call you saying, hey, I got a great stock tip for you.
	You should buy this. And it's like, well, if it's such a...
	Great stock tip. Why are you calling me?
	Why not just invest in it yourself?
	Well, of course, they're calling you because they have invested long on the stock.
	They want to drive up the demand so that they can cash in their long position and make money, and then your stock, of course, will collapse.
	I have seen some of this from the inside, and it is a revolting spectacle, and it is really, really sad how many good companies, good investment, good business people are screwed and end up leaving this vile pit of fascistic quasi-capitalism.
	Searching for a healthier and happier free market, which is what I am engaged in, in this exchange of ideas with you.
	So if you find this stuff helpful and useful, please donate at freedomainradio.com forward slash donate dot html.
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	Entirely listener-supported, if you find it valuable, I hugely do appreciate your contributions, which certainly does help me spread the words of reason, philosophy, and evidence to a wider world.

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