Wednesday, February 08, 2006

CNBC: The Tower of Babble

My two main daily sources of business news are CNBC and the Wall Street Journal. I've subscribed to the latter since I left graduate school. CNBC is typically on in the background throughout the day while I am working.

In general, I find the WSJ to be the best daily business reporting available. With the exception of the entertainment-oriented Money & Investing Section, it's a great paper.

However, I have found CNBC to be almost purely entertainment. In fact, recently I went thru the bios for their on-air personalities. What I found caused me some surprise, but even more dismay. From 6am to when Larry Kudlow comes on, at 5pm, there is only one person on CNBC who is listed as having an economics or business degree. Everyone else has english, journalism, or other unrelated degrees.

The reason this matters, in my opinion, is because the shows also cover breaking market news during the day. There is nobody on the network's staff, with the possible exception of Joe Kernan, who appears to be able to provide intelligent, insightful and concise interpretation of news topics. Rather, vague questions and fuzzy comments abound.

For instance, one of the staff was reporting on a recent energy conference onsite from Texas. She provided a "breaking story" concerning the Saudi oil minister announcing that country's plans to double refining capaciy. Sue Herrera, the New York anchor during that show, breathily summed up the reporter's comments with words to the effect, and this is a parphrase, 'well, there you have it, perhaps some important developments coming out of that conference on energy......' So instead of a seasoned pundit, you get airhead remarks like that.

Don't get me wrong- they do occasionally have some good guests. Not blowhards like Jack Welch or his faithful disciple, Larry Bossidy. I am referring to guests like Mike Holland, Mario Gabelli, Larry Kudlow, or former Commerce Secretary Don Evans. And it is primarily to hear these people that I tune in the CNBC network.

However, seeing all these under-educated writers as talking heads, I have come to conclude that CNBC is trying to give the "man in the street" approach fresh legs. Instead of providing in-depth expertise on the program staff, they stand in for the clueless individual by appearing to be clueless themselves.

It would be funny, if I didn't feel that they magnify fluff while missing in depth analysis of the more important business stories. While I do not ascribe such power to CNBC that I believe their lightweight on-air staff causes market volatility, I do believe their reporting misses the opportunity to provide more thoughtful interpretation of business and market developments.

Tuesday, February 07, 2006

GM: More Ado About Nothing

With all the media attention to the so-called news out of GM this morning, you would think they actually have accomplished something.

Nothing could be further from the truth. All that happened is that Kirk Kerkorian got his guy, Jerry York, onto GM's board. This will ostensibly protect Kirk's losing investment in the once-proud auto giant. However, it is widely reported that most, if not all, of what York clamored for has now been done- the reduced dividend, the executive pay cuts, and a few other items.

Perhaps it was just a slow newsday that brought such attention to the ailing auto maker. Seriously, does adding one person to the board really change anything in GM's future?

Monday, February 06, 2006

Hybrid Hoo Haa

It is with some dismay that I have watched the wave of public acclaim wash over the hybrid automobile market segment recently. Even my two daughters have been summarily brainwashed by their liberal teachers to believe that hybrids will be the salvation of our pollution crisis.

The most piercing analysis of the product group which I have read was written a few weeks ago by Holman Jenkins of the Wall Street Journal's OpEd page. In that piece, and it may even have been two pieces, he accurately roasted vendors for preying on consumers' naivete and consciences, while doing virtually nothing to "solve" any "crisis."

Basically, Mr. Jenkins pointed out that, with the current demand for gasoline, hybrid owners are not "saving" any of the fuel, so much as they are allowing others to buy an unchanged amount of it at possibly lower prices, should hybrids actually reduce overall gasoline demand. If anything, they may actually increase energy usage, as they use the power grid to recharge, thus consuming even more hydrocarbons. So much for less pollution.

But the best part of his editorial was his analysis of the economics of buying one of these cars. I don't have the detailed numbers at hand, but he essentially demonstrated that, at the incredible premiums these vehicles command at retail, they set consumers back far, far more in cash than they can reasonably be presumed to be "saving" at the gas pump.

Now, that last point is important, because I have noticed Ford recently pinning its hopes for survival on hybrids. This morning, a representative of the company was on CNBC, touting it's "long" history of producing the vehicles. My question is, exactly who is supposed to be shelling out the extra thousands of dollars one pays to cleanse one's conscience when purchasing a hybrid vehicle?

Is it reasonable to expect to save Ford on the back of a vehicle that is actually uneconomical to buy? Just because George Bush mentioned the vehicle type in his State of the Union address does not, I think, mean it's going to bail out Ford or GM.

However, in the spirit of green folk everywhere, please do go out and buy a hybrid. Save me some money at the gas pump this winter!