Financial Shows



March 10, 2001



BROOKE GLADSTONE: And I'm Brooke Gladstone. This weekend marks the anniversary of Nasdaq's record high when the technology-heavy stock index hit 5,048.62 before crashing back to earth. Cast your mind back to a time before you knew the term "market cap," before Chris Matthews burrowed under your skin like a tele-chigger, before NBC was a suffix. I refer to the period that should be known as B.CNBC. -- before the proliferation of financial news coverage on cable.

BOB GARFIELD:CNBC, CNN-FN, Fox Newschannel, MSNBC -- each has invested untold millions of dollars in huge chunks of their schedules to bring you the very latest from that wildly bucking rodeo bull called Wall Street. But then the irrational exuberance finally gave out -- when investors began to have all sorts of demands for the companies they owned holdings in -- pie in the sky expectations such as profitability. It was like the bulls hit a dead end in Pamplona -- first for tech stocks, then for the broader market, then for the cable shows that followed them.

KYLE POPE: If you put a graph of what's happened on the Stock Market and laid a, a graph of the ratings of these shows on top of it, they would pretty much track.

BOB GARFIELD: Kyle Pope is the TV editor of Inside.com.

KYLE POPE:Carnage is great! And really dramatic declines or-- extremely excruciating wipeouts of companies where you know you get bankruptcies or huge layoffs or CEO's leaving - that, that's good for ratings on television, and people will tune in to watch that. But when you get this sort of slow drip bleed, day after day after day, that, that's where you get into trouble.

BOB GARFIELD:Trouble there is. Ratings for the financial networks with the possible exception of CNBC have fallen sharply, and the best thing you can say about CNBC is that its explosive growth has stopped cold. The consequence has been a lot of activity to regain audience growth. CNBC has begun broadcasting golf for its upscale male audience at hours hitherto reserved for markets minutia. CNN-FN has canceled some under-performing shows such as Digital Jam, and according to CNN financial editor Myron Kandel is re-staging its entire network in a less stocks-centric format called CNN-Money.

MYRON KANDEL: To reflect the fact that we're going to do more emphasis on personal finance, on other aspects of investment, not only the Stock Market, and we're going to get down in the trenches so to speak with where people really invest their money - what they care about -and how they can best manage their finances.

BOB GARFIELD:Fuzzing the issue of declining viewership is the vast audience of the uncounted, traveling businesspeople in hotel rooms and un-traveling businesspeople in their own offices where the TV perpetually tuned to CNN-FN or CNBC has never been measured in the ratings. If the lower numbers of home viewers are attributable to dilettante day traders who got crushed by the retreating bulls, or to more disinterested observers who followed the bull market as a spectator sport and are now tuning elsewhere instead, the actual decline may not be as significant as meets the eye. Nonetheless the networks now have to face some tough questions such as is the current predicament partly a crisis of their own making? Inside.com's Kyle Pope.

KYLE POPE: There was a certain boosterism to the tone of the coverage both-- on, on all of these networks, and there was a sense of, of there's something great going on; there's sort of a wild ride--

BOB GARFIELD: And with every shattering to the Nasdaq's previous high, a celebratory carnival air to the coverage.

BRUNO COHEN: Okay. I mean I guess I'll buy that.

BOB GARFIELD: Bruno Cohen is vice president for business programming at CNBC.

BRUNO COHEN:We're certainly using those numerical benchmarks as an opportunity to say boy, this is extraordinary what it is that's going on. Ce--Celebratory is your term, but-- we're, we're not underplaying the significance of those as, as market benchmarks and maybe I suppose as, as benchmarks that indicate investor sentiment.

MAN: ...but--

MAN: How high could we go? What, what - you know -with the momentum that we are talking about here, where could you see the Nasdaq going?

MAN: For now it seems like you want to be on the long side of technology; it looks like we're part of a, a long term advance here; and I think if you get that part of the equation right, that's where you're going to-- see the best gains.

MAN: Mike, thanks. Have, have a good weekend.

BOB GARFIELD: Cohen, however, by no means buys the charge that CNBC hyped the market. He says that networks frequently asked pointed questions about astronomical valuations of publicly traded companies. But as CNN's Myron Kandel says, hyperbole happens.

MYRON KANDEL: We try to-- to - not to appear to be cheerleading the market. We want to be dispassionate, objective observers. We are human, however, and I'm sure -- can't remember an example to give you -- but I'm sure we made a mistake now and then.

BOB GARFIELD:The upshot is that some viewers either accustomed to boosterism or simply fearful of dispassionate reporting's effect on the markets view un-boosterish coverage as irresponsible. Bruno Cohen of CNBC.

BRUNO COHEN: Last year-- very influential commentator, Abbie Joseph Cohen [sp?] changed her recommended allocation for how much, how much of your portfolio ought to be in stocks and how much should be in bonds, and she reduced I think by five percent the allocation that she recommended for being in securities, and it had an impact on the market or appeared to. And we were reporting that story pretty prominently and, and reprising it and getting other, other reaction to it, and I remember getting a letter from a viewer -- a woman who had-- taken a lot of her IRA money and put it into high tech stocks and couldn't understand why we would i--in her view publicize these statements by Abbie Joseph Cohen! Why not just ignore it, because what we were doing was forcing the market down!

BOB GARFIELD:Nobody blamed the messenger when the Nasdaq was at five thousand, but for investors and broadcasters alike, it's live-by-the-market; die-by-the-market. And such commentators as Kyle Pope believe at least one network will succumb to mauling by the bears. Conventional wisdom says the advantage in the financial news shakeout will go to programming like CNBC's Squawk Box which relies as much on the quirky mix of talent as on the content itself. But there's more conventional wisdom that may apply in yet one more livestock metaphor. You can't make a silk purse out of a sow's ear, and a bad market is what it is. For years the raison d'etre of cable financial news was to tune in and profit by what you'd learn. The proposition stay tuned and cut your losses doesn't have quite the same ring.