Steinhardt, Cooperman, Dachille & Gabelli On CNBC This Morning

This morning's CNBC programming featured an hour with hedge fund managers Michael Steinhardt, Lee Cooperman, and Mario Gabelli. After 8AM, Gabelli was replaced by Doug Dachille, the always-interesting, outspoken fixed income maven.

CNBC billed the first hour as one of 'hedge fund legends' opining on the current state of financial markets and the economy.

It was, to be sure, an interesting hour. But not necessarily for the reasons CNBC expected.

First, there wasn't really anything special about these three particular managers. One might even suggest that CNBC couldn't get the "real" legends- Steve Cohen, Eddie Lampert, or one of the founders of Brahmin or Fortress.

What was on offer was surprisingly transparent, in the cases of Gabelli and Cooperman.

First, Gabelli is really the only large-scale, active manger of the three. And he was recently in danger of doing jail time for abetting a woman who either was his employee, or the wife of an employee, in fronting for Gabelli to acquire a federal spectrum license. The case got a lot of attention, and Gabelli was severely tarnished for having obviously, if not at the level of proof of criminality, played games to get the value of such a license on the cheap by exploiting minority set-asides.

As such, Gabelli presented himself as fast-talking, on the make, and generally shallow. Very marketing-oriented, as if his appearance constituted a great, free sales opportunity.

Cooperman was a bit more interesting. While I have not ever met Cooperman, I have had a fairly close acquaintance and a business partner who know him well. Cooperman was, years ago, the Abbey Joseph Cohen of Goldman Sachs before it was such a prominent post. Since his departure from the investment bank, Cooperman's track record with Omega Partners, his hedge fund group, has apparently been uneven, to say the least.

Looking at him on the CNBC set, one saw, as with Gabelli, a bit of delight at the free marketing opportunity for his fund. Cooperman's Omega is an active fund, but I don't believe he has the assets under management of Gabelli's fund complex.

From my personal contacts, I gather that Cooperman is very tempermental and prone to weight gain when under stress and performing poorly in the markets. It looks like last year wasn't good. He also is sporting what can only be described as a colossal comb-over.

Alone, it might have been less noticeable. Flanked by the snow-haired Gabelli, and the purposely-bald Steinhardt, Cooperman appeared much less natural.

While Cooperman made some decent points about recent market performance and government intervention, he was, on the whole, predictable and safe in his remarks.

Then we come to Michael Steinhardt. I had not seen much of Mr. Steinhardt prior to this appearance. Other than reading about him in years past as a prominent and highly-successful short investor, art collector, and founder of WisdomTree, he was pretty much a mystery.

But, by a country mile, he was the most interesting and compelling of the three "legends" on CNBC this morning.

What impressed me most about Steinhardt was his laser-like focus on what he termed the 'change in morality' in the US during this period of economic uncertainty and deleveraging. His slow, careful, richly-structured comments reflected a very intelligent, philosophical and wide-ranging mind.

Of all his comments, the three which impressed me most were these:

-The recent and ongoing shift in morals and sentiments of US citizens are of paramount importance with respect to our economy and financial sector and markets in the foreseeable future.

-The current administration seems to be attempting to skip the 'restructuring of debt' step necessary to any economic recovery, and moving directly to flooding markets with liquidity, while leaving inept managements, such as auto makers and commercial banks, intact, rather than force them through bankruptcy. Steindhardt clearly indicated a disbelief that this will work or be productive.

-What is meant by a "depression" in our current environment? Due to automatic stabilizers, i.e., transfer payment mechanisms, Steinhardt believes that an unemployment rate as low as 12% will trigger consumer behaviors and public sentiment generally associated with much higher 'depression' unemployment levels.

-With respect to the next six-twelve months, he prefers to not lose any more money and sit tight, rather than allocating assets to the market in long positions.

Overall, Mr. Steinhardt projected an intensely astute, contemplative and really, really intelligent persona. I'd love to spend a long, non-alcoholic lunch with him. It would be a fascinating discussion. His calm demeanor and self-assured Socratic approach to his own thoughts and the comments of his fellow guests marked him as an unusually open-minded, insightful and candid observer of the US economy, its financial markets and citizens.

Doug Dachille joined Steinhardt and Cooperman for part of the next hour, providing an electric and fast-paced disgorgement of opinions. Dachille expressed some very blunt opinions casting doubt on the current government handling of the financial crisis, but also made some fairly silly comments contending that the holding of index funds has been the cause of poor corporate governance.

While it's difficult to recall every exchange among Gabelli, Cooperman and Steinhardt, the lasting impression I have is that it was somewhat less of an "event" than the CNBC producers had hoped. They would have been more successful by simply having Steinhardt on alone, or perhaps with Bob McTeer, Richard Armey or Michael Holland.