'Today' Sends Mixed Signals on Markets
The NBC “Today” show can’t seem to decide on an angle for its coverage of troubling developments on Wall Street over the weekend.
Host Matt Lauer declared a “Code Red” for the economy on March 17, reporting that Bear Stearns – once a highly respected investment bank – tanked last week and was bought by JP Morgan Sunday night for only $2 a share.
Meredith Vieira, reporting from the floor of the New York Stock Exchange, called the Federal Reserve’s involvement in the buyout “the Fed’s most aggressive move since the Great Depression.”
But while Lauer and Vieira were channeling Chicken Little, CNBC financial contributors urged caution, patience and even a hint of optimism.
“Sure, if you are an investor in Bear Stearns, an involved, an employee there, you are going to get impacted. But away from that we probably will not see a whole lot of fallout,” CNBC’s Maria Bartiromo said. “Yes, we’re going to see a very sharp decline in the financial services part of the economy today but I would be very, very hard-pressed to believe that this is an across-the-board cut in the economy and the industry overall.”
“Mad Money” host Jim Cramer said even investors with money in Bear Stearns aren’t necessarily “in trouble,” to use Vieira’s words.
“If you’re a diversified investor, you’re not going to get hurt. Those who only had their money in Bear obviously will get wiped out today,” Cramer said. “But you most importantly don’t have to take your money out of a bank. That’s what the Fed did this weekend. Your investments are fine.”
[Update: Cramer told an investor who inquired March 11: "Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.”]
Both analysts said there would be positive opportunities for investors in the wake of the Bear Stearns collapse. “I think there will be great opportunities away from the financials,” Cramer said. “Your stock isn’t fine if you own a bank, but boy, if you have money at Merrill or Citigroup you’re going to be guaranteed. Do not panic.”
Bartiromo even added some historical context, noting that in previous financial services crises, “when you look at the market three months or six months after those major events, we actually have gains. So three or six months and beyond, you really want to be thinking long-term in this situation.”
“I traded in the 1987 crash,” Cramer added. “It turned out to be, six months later, the greatest buying opportunity in history.”
Glimmers of hope and optimism amid “Today’s” gloom-and-doom approach to the news.
Related:
Oops - CNBC's Cramer Said 'Don't Move' from Bear a Week Before Collapse
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