Roubini and Malpass on Kudlow
While doing my end-of-day routine tonight, CNBC on mute, I saw the familiar faces of Nouriel Roubini and David Malpass. I backed up the TIVO so that I could watch the entire discussion.
It is good TV, I suppose, and Kudlow loved it. At the end of the segment he observed that the two of them did not agree about anything! And he was right.
The problem is that most viewers cannot possibly sort out any truth from this kind of discussion. The participants only have a short time on each answer. The impression they make has more to do with their debating skill and sound bite preparation than the merits of their case.
The significance of this is that people are really making important financial decisions based upon these discussions. If we were listening to two scientists debating some point about particle physics or something, we would realize that we were not qualified to decide who was right. But when the subject is economics, people seem willing to plunge in.
I hpoe that my client Mildred was not watching this one! Are people really affected? Barry Ritholtz featured Roubini and attracted an honest commenter who admitted that he had lost money, following what he believed to be Roubini’s advice. For every person like that who steps up to say what he did (and get excoriated by the Ritholtz community) there are many others who would never admit it.
I want to be clear and fair. Both Roubini and Ritholtz have been specific in their advice, including some good trading calls, especially by Barry. Nonetheless, these nuances are lost on many viewers.
In my role as an expert consumer of economic commentary, I have an advantage. I have actually read extensively on the arguments of both, so I knew what they were trying to say in the time available. To take but one example, Roubini returned repeatedly to the September employment report, a gain of only 51,000 jobs. Malpass then had the task of trying to explain this number in the context of the BLS revisions, a subject that I covered here and again here.
It was impossible for him to do this adequately in the context of the television program. This helps to explain why many people are caught up in the current cycle of negativity. It may prove to be an expensive decision.