The Truth About the Truth

Where do you get your news? CNN? MSNBC? CNBC? FoxNews? The major networks?

There's a problem if you answered "yes" to any of the above. Of course, we all know what the problem is. MSNBC might as well be called "The Obama Channel," and Fox could be called "The McCain Channel." CNN and the networks fall closer to the MSNBC side of the aisle. The point is, they're all biased.

Watch them all, like I do, and you wind up with the distortions, half-truths and outright lies of both sides, but still no facts. It's entertaining, but not very informative.

Let's talk specifically about the fail-out, as I now like to call it.

If you watched those outlets listed above, you thought it was bound to pass. Paulson, Pelosi, Dodd, Frank, and their ilk made sure they got all the face time with the press, and the media basically ignored the opponents, who were seen as being on the fringe.

Early on, nobody was talking about the ten-to-one constituent opposition to the bailout. They just buried it. (I found out from a Wall Street dealer e-mail that went out to client firms.)

If you wanted to know what was really being said, you could tune in to C-SPAN at ten o'clock at night, when a brave few stalwart lawmakers were fighting the good fight in a near-empty chamber.

But most of us won't watch C-SPAN. We don't want the full context, live, we want the sound bites, spun. So we tune into CNBC or Fox or MSNBC and they tell us what they want us to believe.

I'm going to single out CNBC now, because they report market news, and because I have the most experience with them.

For one thing, I watch them throughout the day, because, like most brokerage firms, my firm has a live CNBC satellite feed to our trading desk.

For another, I know how they get their "experts" and "panelists."

When you see that trader from UBS talking about stocks, or that analyst from Citigroup talking about futures, you might be wondering, "How does a guy like that get picked from among the thousands of traders and analysts out there? Wow - he must be really smart."

I'll tell you how he gets picked: advertising dollars.

UBS and Citi are big advertisers on CNBC. But I'll get back to that later. First, I need to provide proof for my bold claim.

I have personally been invited to appear on several CNBC shows, including Larry Kudlow's. (As an aside, did you know that Larry used to be Bear Stearns' chief economist back in the late '80s and early '90s? Then he started missing meetings with important Bear clients. Turned out he had a nasty little coke habit. Just thought you'd want to "bear" that in mind.)

When I got the first call inviting me on, I was flattered. I could barely contain my enthusiasm when I said, "Sure!"

"Great," I was told. "The minimum package is $15,000, and for that you get ..." Now, this was $15,000 back in about 1999 or so, when I got my first invite. I can only imagine what the price tag is now - I don't know, because I no longer take their calls. I know the drill.

Okay, so why wouldn't I spend the money for that opportunity for my business? And why does UBS?

Simple. My clients generally don't watch CNBC, and my firm doesn't profit from the market conditions that a UBS profits from.

Generally speaking, investment firms make money when people are investing. Remember the dot-com bubble? The day-trading how-to's? Everybody and his brother tuned into CNBC. But during a bear market, we watch other stuff - something that'll cheer us up.

And banks make money when people and companies are borrowing. During a recession, that's not happening.

That's why bank and Wall Street economists are always over-optimistic. And that's why CNBC commentators like the marginally attractive but sadly vapid Erin Burnett look for the silver lining in every cloud.

Oh, a big name can get on CNBC for free. Alan Greenspan, Warren Buffett, Jim Rogers, Mark Cuban - those people are courted constantly by CNBC. But to pick an analyst or a trader to provide today's infomercial - er, insights - they contact investment firms, offer their package, and get a list of names, corresponding to the market or area of the economy in which those individuals have expertise. And they offer them air-time based on the ante.

So now you know how it works. Free speech meets free enterprise. As Russian comic Yakov Smirnoff says, "America - what a country!"