Corrupt Media Update: CNBC Hypes Its Owner, General Electric, As GE's Performance and Stock Plummet

THE BUZZFLASH EDITOR'S BLOG

By Mark Karlin

BuzzFlash has written a lot lately about the economic infomercial known as CNBC, which burst into the national discussion due to Jon Stewart's searing take down of the network after Rick Santelli's televised "stunt" defense of the moneyed-class.

As Stewart recently pointed out while guesting on the Letterman show, the Wall Street cheerleading (advertising) that CNBC does is pretty typical of the financial networks. Why you even have CNBC -- after the complete failure of de-regulation due to greed and legalized financial gambling debts in the hundreds of billions of dollars -- blaming Obama (who has barely got his feet wet) for the drop in stocks because he won't hype their "salesperson value" over their actual value.

Now, it turns out -- and follow me on this -- that General Electric, the parent company of CNBC, NBC and other media outlets, may be going down the tubes.  In fact, GE may have misled stockholders about its ongoing performance just before a critical report.

We know this because Joe Nocera -- the old-style real kind of financial journalist from the NYT who professionally dissected AIG on "The Daily Show" the night that Jon Stewart decimated CNBC -- wrote a March 6th article in the NYT entitled, "Behind the Curtain at GE" In that analysis of GE's plummeting prospects, Nocera wrote:

"G.E. Capital," wrote Nicholas P. Heymann and Matthew Kelley, two bearish analysts at Sterne Agee, "is now confronting the prospect that a downward trend in fundamental performance, fueled by weakening end markets and magnified by several liquidity constraints, could potentially lead to an extended period of steadily lower earnings, depleted loss provisions, lower credit ratings, rising borrowing costs" ... well, you get the picture. Mr. Heymann, who has followed G.E. for 27 years, issued his report on Tuesday morning — just two business days after G.E. cut its previously sacrosanct dividend by two-thirds.

Within 24 hours of Mr. Heymann's report, the company's stock, which had been $17 a share just a couple of months ago, dropped to under $6: "That's a scary number for G.E.," said Richard Hofmann, an analyst with CreditSights who is also a G.E. bear. The credit-default swaps spread suggested that investors were worried about default.

But when you own the media, you always have a megaphone for hyping up your faltering financial condition.

So it was hardly a surprise that as CNBC blames Obama for not cheerleading on an underperforming market (because of mismanagement and greedy financial plays by many CEOs and their manangement teams of "bonus baby" con artists), it also -- according to Nocera -- gives its parent company, GE, a national television audience to tout "how well" it is doing.

According to Nocera,

On Thursday morning, the company's chief financial officer, Keith Sherin, appeared on CNBC, which G.E. conveniently owns, and offered a passionate defense of the company. "We have an incredibly strong liquidity position," Mr. Sherin said. "We have $45 billion in cash," he added. "We have no triggers that we can see that would have any call on our cash in the short term." Later that afternoon, I had my own conversation with Mr. Sherin. "We don't need more capital," he insisted. "On a tangible common equity basis, we are fine. Our tangible common equity for GE Capital is higher than any of the big banks." He added: "We are trying to rebuild credibility and also trying to be clear and open and honest." By the end of Thursday, the stock closed at $6.66; by Friday, it stood at $7.06. For the moment at least, the pressure had eased.

There could be no greater ethical conflict of interest than CNBC letting its parent company use its media subsidiary to basically issue a 3-dimensional press release.  But that is what comes with big corporations owning big media.

If this episode of corporate/media incestuousness with critical financial implications to stock holders doesn't serve as an example of what a serious threat we face from Wall Street ownership of the media, we might as well just take a goblet of hemlock -- as Socrates did -- and kiss our dreams of economic recovery goodbye.

BuzzFlash is here -- pleading daily for support -- as are other progressive Internet sites. Pro-economic fair play advocates have the slimmest of toe-holds on television with Maddow, Olbermann, Stewart, and Colbert -- and some successful progressive radio talk show hosts.

But the "Big Media" is still one big corporate shill for the most part, some more egregious in their public relations role for the rich than others.

CNBC is in the shameless "red alert" category, but it's not unique.

For nearly nine years, BuzzFlash has been confronting this threat to our economic well-being and democracy head on.  But we don't have billions of dollars and national television and cable networks.

We just have you and a dedictated staff who work for peanuts.

It's not an easy task taking on the entrenched oligarchy, which runs our big national media.  Sometimes it's damn depressing. 

But after a few punches from the schoolyard bully, you can either run or stay and fight.

We plan on holding our ground for awhile. In 2010, it will have been a decade of BuzzFlash.

Help keep us punching away, because we don't have the corporate "welfare limousine" backing to state our case on CNBC.

And if General Electric starts to go under, it will probably get a government bailout of some sort through an "arranged" merger. If we miss a payroll at BuzzFlash -- and Lordy we come close nearly every two weeks -- there's going to be no helping hand from Washington, nor should there be.

We are in Chicago, a long way from Wall Street; BuzzFlash is populist-progressive, not D.C. endorsed.

We plan on keeping it that way, with your help.

We're in a recession/depression, but it's going to stay that way if the only media survivors are the likes of CNBC.

THE BUZZFLASH EDITOR'S BLOG

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