Wednesday, April 29, 2009

Why CNBC Pumps the Market

A lot of you wonder why CNBC "appears" to pump up the market, shrug off bad news, and spins bad news into good news. It seems much more apparent lately than 3 months ago.

The answer is quite easy actually. Call it a conspiracy theory but her is how it goes...

Back in January, CNBC had some pretty negative comments and would invite some pretty prominent perma-bears on their shows. It created negative sentiment in the market and some say it helped propel the market lower.

In very late February, you notice the Obama administration started a campaign of positive news. About at this time, you saw that CNBC stopped inviting prominent bear economists and analysts during the trading day, and only invited a few of them very early in the morning, well before the market opened. You also noticed that Charlie Gasperino (sp?) faded away as did some other "reporters" with negative views. At the same time, Donnie Deotch (sp?) comes onto the scene and the entire crew appears very positive about the market. Rick Santelli stops bashing Washington.

Quite a contrast. Well, something appears to have happened. And the clues are not hard to figure out.

CNBC is owned by GE and it is not a secret that GE execs had meetings with Obama about his energy plans. GE has a very good chance of landing a good portion of those contracts. It doesn't take much of a stretch of imagination to see Mr. Obama asking GE to tone down CNBC and help promote the market and the economy in general in return for getting those contracts.

Take it as you might, but these seems like politics as usual.


  1. Please don't forget former CNBC host Dylan Ratigan -- the most honest voice on the network:


  2. Beamer Dog, I think its time to be net long the market. Can't fight the trend.

  3. Wow, market is up 3%! As aforementioned, DJI will test the 9500 level by June, maybe earlier.

  4. I think your right, but it's hard to fight the Fed!

  5. Jay, I let all the retail investors jump on the long bandwagon after a 30% run. If anything, I take some money off of the table but certainly don't jump on the long bandwagon.

    The key is to always have positions to cushion the blow. I am not here to get rich quick. I have learned that lesson many years ago. Always hedge.

    What I have found, and glad I kept with the game plan, is to buy small stakes inthings like SDS, SRS, SKF and sell the covered calls right after OpEx. the premiums are outstanding and it cushions the blow on the way down. I am short BAC and AXP but only losing money on AXP, and it does hurt but still have not hit my stop. The other cushion I have is TBT and EEM, both have done very well so far.

    What is amazing is I had stops on AXP and BAC today which missed the stop price by must 1 cent on BAC and 3 cents on AXP. talk about close.

  6. I have short position on AXP as well. Though I have entered too low at $18 and average more at $23 level. I am not adding more. At this moment, I don't set the stop order. I truly think that AXP is way overbought when it has gone from $14 to $25 in 3 weeks based on not much of great news at all. I also jumped in and grab some faz and SRS today. Looking for the market to retrace next week to 840 level, I hope.