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CNN Bias: Ali Velshi

Let’s be frank: Anyone giving a view to a significant audience is obliged to be truthful. Now, consider this excerpt from CNN today…noting the “angle” (and that’s being nice) that CNN reporter Ali Velshi takes:

KEITH MCCULLOUGH (GUEST ON CNN): I think what’s happening in Europe is just a preview as to what’s going to happen in the U.S. It all basically starts with debt. So if you believe as a government official that you can solve the problems that are anchored in debt with more debt you are going to end up with the same problems that the Europeans are facing. And I think that we are three to six months away from that coming home to roost here in the U.S.

VELSHI (CNN ANCHOR): Why is it that lots of people go out of their way, Keith, to tell us how the U.S. is not the same as Europe? Our debt issues are certainly are not the same as Greece’s, as Italy’s, as Portugal’s, why are you suggesting that we will get into the same pickle?

MCCULLOUGH: At the end of the day from a deficit perspective, the U.S. — the deficit as a percentage of your GDP is exactly like Greece. It’s going to be pushing close to 12 percent. And anytime we have an issue, like today, for example, with the jobs report what is the answer? The answer is more government, more government spending which is going to simply keep pushing that deficit?

VELSHI: Hold on. What are you talking about? When you have a jobs report like this week, the answer is more government, more government spending? Where did you hear that from? We’ve been discussing that endlessly. That has not been anyone’s suggestion.

MCCULLOUGH: Well I think that that is definitely going to be the suggestion. If you look at this mornings …

VELSHI: Keith, this isn’t an opportunity to just come up on TV and bash government. What are you talking about?

MCCULLOUGH: This morning’s number, if you look at the job ads, 400,000 of them were government-hired workers.

VELSHI: So no one has come out and said, oh my god, let’s have 800,000 government jobs next month. Everybody has said, this is not the way we actually want things to go. We want more private sector hiring. Christine, have you heard one person telling you that this is fantastic; we should have more government hiring? I don’t know what Keith is talking about.

VELSHI: I don’t understand what your premise is, Keith, because that’s not the answer. What should we be doing differently?

MCCULLOUGH: Well the answer will be, from a political perspective, that is a forecast, Ali. That is a forecast. That is what government’s do that have problems, they spend more and more money, taxpayer money to hire.

More from the transcript:

MCCULLOUGH: I think that, look, the market’s ganging up on the three of you because at the end of the day the market doesn’t lie, politicians and people do. And the American government said they were going to solve this than you can go do that. But risk management Ali, starts with watching what the market is telling you.

VELSHI: I hope the market is as cruel to me next year as it was last year. I hope I suffer through another 70 percent gain in the broader markets, Keith. If that’s your biggest plague that you wish on me, I’ll take it.

Consider those last few sentences of arrogance from Velshi as you read the stats that he forgot to mention:

The S&P 500 (SPX) closed on 5/22/2000 at 1400.72 and closed on Friday 5/28/2010 at 1089.41. That is a 22.2% loss in value in ten years of buy and hold investing not allowing for inflation. That means a buy and hold investor lost 22.2% of their money plus another 20% for inflation — a 42% haircut. The period of history the buy and hold advocates really don’t want you to know about is 1929 to 1954. The highest close for the Dow was 381.17 on 9/3/1929 before the beginning of the great bear market, and it took 25 years to get back to ‘even’ on a nominal basis (not counting inflation). The Dow closed above 381 for the first time on 11/23/1954 after the 9/3/1929 high.”

Does Velshi seem like an honest guy as he yucks it up about “suffering through a 70% gain” while failing to mention the real stats [the real stats of buying and holding being underwater for over 10 years]? No, he doesn’t. Is he the type of guy who should be educating anyone about money and markets? Clearly not. As a teacher, I resent Velshi’s reckless use of a CNN megaphone to preach to many who surely don’t know that he is full of it.


One reader responded to my comments above by saying:

Isn’t what you’ve written below libelous (not to mention an unnecessary personal attack)? ‘Does Velshi seem like an honest guy as he yucks it up about “suffering through a 70% gain” while failing to mention the real stats? No, he doesn’t.’

The libel is? The personal attack is? The unnecessary part is?

Since you have thrown out a very specific and unfounded attack against me (libel), and since you have failed to back your view in any way, it is assumed that you agree with Velshi (that is unless you correct my assumption).

With Velshi tossing out that 70% line he is saying clearly:

1. That he made that 70%.
2. That he is a buy and holder.

So if he is a buy and holder, and he says he made 70% while ignoring the prior 10 years where all buy and holders are still underwater — he is manipulative at best. Or, and I guess this is possible, perhaps Velshi perfectly timed the bottom from March 09 to May 10 and that’s how he made his 70%? And if he is this wonderful market timer, capable of nailing bottoms and tops perfectly, where is this all disclosed?

When someone appears on TV regularly to large audiences, when they preach money and markets, and when they make the statements Velshi does, I stand by my view. The fact that you are remotely sympathetic with Velshi, and since you seemingly see nothing wrong with what he is doing, you make my point better than I ever could.

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