Saturday, March 07, 2009

Rick Santelli: bitch-slapped

By now who hasn't at least heard of CNBC on-air financial personality Rick Santelli's "Rant Heard Round the World," in which he castigates "losers" who shouldn't get help by the government on their mortgages.

Santelli, a former commodity and futures trader turned professional entertainer, launched his diatribe from the floor of the Chicago Mercantile Exchange, surrounded by the guys we can thank for $4.00 a gallon gas not too long ago.

Short investment lesson: greed whips up panic over the cost of gasoline in 6 months and people investing in futures bid up the price to astronomical levels. Traders make a shitload of money. Fear they paid too much grips investors and the price falls like a stone. Traders make another shitload of money.

"On-Air Editor" Rick Santelli's job? Whip up the fear and panic.

Down in the pit where Rick prowls there's been a huge market over the last few years in "derivatives:" financial contracts, or financial instruments, whose values are derived from the value of something else. Sort of like making a bet on the outcome of a bet. Many experts are saying it was the collapse of a specific kind of derivative, the mortgage-backed security, that triggered the economic crises of 2008. These were repackages of the loans made to the "losers" he vented against so viciously.

Jon Stewart of the Daily Show once again proves himself to be better than "real" reporters in his segment on Rick Santelli (and financial "news" in general) the other night:



Here's the deal: the job of Rick Santelli, Jim Cramer and their ilk (and of those traders, and the investment industry as a whole) is not to make you money -- it's to make them money.

And if no one is panicking and desperate for 24-7 financial news, Rick and his cronies have no jobs. They'd have to go back to making cold calls from some boiler room.

Santelli's not a reporter or financial adviser -- he's an entertainer.

Don't ever forget that.

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