Wednesday, March 11, 2009

Turd Mining

When Jon Stewart played clips of CNBC's obnoxious, shouting, self-proclaimed financial guru Jim Cramer, host of "Mad Money", asking people to buy Bear Stearns seven weeks before it went under, then advising them again that they could count on Bear Stearns, five days before it crashed, he was accused of "cherry-picking" by Joe Scarborough on MSNBC's Morning Joe.

Jon Stewart's response was to say, No--he preferred to think of it as "turd mining." Well, where Jim Cramer is concerned, the mine is vast and rich.

New video from 2006 has surfaced today, where Cramer blatantly admits to market manipulation and illegial activity that is "okay" because the SEC won't catch on.

In a videotaped interview with's columnist Aaron Task, Cramer says that market manipulation is "a fun game, and it's a lucrative game." He suggests all hedge fund managers do the same. "No one else in the world would ever admit that, but I could care. I am not going to say it on TV."

He goes further: "A lot of times when I was short at my hedge fund, and I was positioned short, meaning I needed it down, I would create a level of activity before-hand that could drive the futures."

Cramer's view on falsely creating the impression a stock is down what he calls "fomenting"): "You can't foment. That's a violation... But you do it anyway because the SEC doesn't understand it." He adds, "When you have six days and your company may be in doubt because you are down, I think it is really important to foment."

Cramer on the truth: "What's important when you are in that hedge fund mode is to not be doing anything that is remotely truthful, because the truth is so against your view - it is important to create a new truth to develop a fiction," Cramer advises. "You can't take any chances."

Cramer speaks of defrauding the investing public and committing other violations of the law, as casually as if he were talking about the weather, while also demonstrating contempt and disrespect for the SEC and its authority.

Here's a poem that another blogger wrote, constructed entirely from his words:

"The buyers will come to their senses
and realize that everything they heard was a lie
But then again Fannie Mae lied
and it's just fiction and fiction and fiction
The way that the market really works is
Leak it to the press
Leak it to CNBC
That's also very important
And then you have a viscious cycle down
And it's a pretty good game
And you can play it for a percent or two"

How many more like him are gaming the system? How many contributed to our economic collapse? Our financial system is being run like a casino. As someone said, the market is an amoral system. It's not immoral or moral, but it can be manipulated by immoral men.

The free market purists who believe the market is the solution to everything take the rest of us for suckers. They cry "socialism", against any form of government funding, unless it suits them. They had no trouble being awarded multi-billion dollar no-bid government contracts, for example.

Well, the fresh, ripe turds of Jim Cramer's strategies for gaming the market and exploiting investors, are pungent reminders that the market cannot be relied on as the sole engine of our democracy. The problem, as Thomas Frank said in his 2000 book, "One market under God," is not capitalism, but "extreme capitalism. "

From a March 2001 review of the book by James K. Galbraith:

"Extreme capitalism": the obsessive, uncritical penetration of the concept of the market into every aspect of American life, and the attempt to drive out every other institution, including law, art, culture, public education, Social Security, unions, community, you name it. It is the conflation of markets with populism, with democracy, with diversity, with liberty, and with choice---and so the denial of any form of choice that imposes limits on the market. More than that, it is the elimination of these separate concepts from our political discourse, so that we find ourselves looking to the stock market to fund retirement, college education, health care, and having forgotten that in other wealthy and developed societies these are rights, not the contingent outcomes of speculative games.


  1. Awesome post. Thanks for putting this out there. I guess I kind of understand this turd's disrespect for the SEC--Where were they? If everything is illusion in this game, then why don't they pretend that the Dow and NASDAQ are doing fine and keep those green arrows going up? If people see that they will have confidence. I am not a stock market person, but I'm forced to be through my retirement. I don't want this anymore, I'd rather put my money somewhere safe. When did all these recessions and depressions begin? Only in the US? After the Civil War? I know Mark Twain lost a lot of money in investments, but I don't know if it was the market. Whoa, sorry so long--see, good post!

  2. I love long comments, and you ask good questions. I use to think that as long as you made sound investments, and didn't go for a lot of high-risk stocks, you could count on a return on your money. But it's like a house of dominoes and I don't know what investments you can trust anymore.

  3. Your post is very interesting. Unfettered capitalism, or "Extreme Capitalism" as mentioned here, can not exist without negative impact. Very few advocate the elimination of checks and balances in the financial and investment industries. Nor do they advocate a completely free market. The disagreement is to what degree of control can be instituted without adversely affecting the operation of the systems.

    It appears that Cramer is a crook and a crook is a crook no matter what one's political, sociological or religious affiliations. He has evidently allowed his greed to circumvent his basic sense of right and wrong (assuming he ever had this to begin with)and will be dealt with accordingly.

  4. Thanks for reading. I suspect there really is no such thing as a truly free market, as long as people are able to manipulate and rig it to their benefit. I wish I were hearing more debate in this country about what degree of control is the right amount. It seems I hear a lot more from the free market advocates who don't want any control at all.