Me on CNBC Talking Stein (When Not Being Interrupted)

I was just on CNBC's Closing Bell show debating Charlie Gasparino on the merits of Ben Stein's position regarding Goldman Sachs and Jan Hatzius' recent paper. Based on yesterday's post, I think you all know where I stand on the topic. Mr. Gasparino, however, felt compelled to talk, talk, talk, and not debate, though I did take away from his monologue that he disagreed with me. He said that "all shops talk their book," and that "all his friends on Wall Street" know that Ben Stein is right. Huh?

Well, I can't speak to Charlie's friends, their existence or their intelligence, but I can tell you that NOT ONE PERSON that I know from the Street thinks that Mr. Stein's piece should be used for anything other than lining the family guinea pig's cage. But hey, maybe our worlds just don't intersect, I don't know. But I do know that there is some serious mis-information and bilge water being sprayed around on this topic, and I hope smart readers/watchers and consumers of media can separate the good from the crap. Because the crap on this issue is plainly abundant.

PS. next time I know I'm going on CNBC I'll do what Paul Kedrosky does and tell my readers in advance so they can watch and chuckle.

Comments

[Sherman McCoy]

Goldman is a sleazy self-serving scumbag of a firm. The only reason they make more money than Croesus on a consistent basis is because they're dirty.

That said, most traders are too busy ridiculing economists to ever take one seriously, or ever give them any real information.

As far as selling product you don't believe has any value, that's not a sin,that's what Wall Street was invented for.

[acepedro45]

If Ben thinks Hatzius' paper was an attempt to sway the market in Goldman's direction, fine. Looking at the same set of facts, I highly doubt it, but fine.

The problem is that Ben garnishs an already dubious conclusion with some very slippery language next:

"Goldman Sachs was injecting dangerous financial products into the world’s commercial bloodstream for years."

That is outrageous. Roger correctly identies the rhetoric as populist, complete with Henry Paulson as Goldman's puppet. It tells the masses just what they want to hear: that big evil corporations are the cause of all the economic turmoil, and they caused it deliberately to make an uncaring buck.

Ben should stick to judging America's Most Smartest Model.

[Smiff]

Pretty sorry stuff. First, the ad hominem argument; then he just tries to shout you down.

Ben Stein and his claque just don't grasp the point that the orientation of Goldman's trading book is utterly irrelevant to the truth or falsity of Hatzius' economic argument.

You won't get any sense out of them. They can't think straight.

[Yaser Anwar]

Just saw the video, nuts. I'd love for Mr. Gasparino, whose book 'Blood On The Street' I thoroughly enjoyed, to send me an email so I can send him all those pieces in my Inbox that were calling for calamity before Jan Hatzius (yaser AT yaseranwar.com). I would urge readers to just go to Nouriel Roubini's blog, and/or John Mauldin's and check up the archives.

Like I mentioned in the post prior to this, the Media KNOWS VERY WELL that they can exploit a piece of GS a lot more than most banks. Want proof? UBS titled a paper expecting USD to strengthen going forward.

More recently, GS came out with their top 10 macro trades, and calling for a similar trade (though expressed differently). And guess what? Yes you're right. More articles were written about GS's macro trades (USD and Gold ones) than UBS. I wonder why (the ones I've read were from Report On Business/Globe&Mail & Bloomberg).

If Mr. Gasparino knows that the sell-side banks talk their book, then why is he calling foul? And the point about GS selling their ECN to NYSE was a poor one.

The Arch exchange allowed NYSE to be a lot more electronic, which they were not compared to NDAQ, and gain market share in the rapidly growing algorithmic trading market.

I don't have to tell readers of this blog that a good deal of business also operates through relationships. IMO, and experience, 9/10 times a business will do deals (applies to hiring and other aspects too) with someone they've already established a relationship with provided the risk/reward is null to closely matched with a different business who they don't have that relationship with.

Though one thing I must give credit to Mr. Gasparino for: he's very good at using fallacies to sway viewers. But I'm afraid this will not work when the viewers are well informed.

Yaser

[Ross]

Hey Roger,
I dug up the link from CNBC.com

http://www.cnbc.com/id/15840232?video=602946579&play=1

[Paul Kedrosky]

Classic stuff, Roger. Truly.

[Murray]

Thanks, Roger for your rebuttal of Ben Stein's vindictive essay. Two more arrows for your quiver. If Ben thinks that Goldman is such a venal institution, why does he own its stock? He is now complicit in this nefarious organization with its mafia like tentacles that reach into the Treasury Department and elswhere. Note that Stein had to go back to 1929 to find Goldman engaged in legally manipulative behavior. To my mind his example casts a shining light on the fact that in the last 78 years, despite the worlwide nature of its engagements, Goldman comes out squiky clean.