In September 2009 it appeared like there may be some hope for CNBC yet. The channel had just received its latest import in the face of one Simon Hobbs, whose first appearance on the station involved him making a total mockery of the ridiculous momentum chasers on Fast Lost Money. Unfortunately, in the subsequent 9 months, it appears the GE Goebbels crew visited Mr. Hobbs in the deep of the night, resulting in an ideological and propaganda transformation that makes Dr. Jeckyll and Mr. Hyde look tame by comparison, and is more reminiscent of Jeff Goldblum walking through a teleport device. Luckily, today Delta Advisors' Michael Pento proceeded to provide a smackdown of the currently unrecognizable Simon Hobbs that only rivals his own friendo treatment of TV's best-tanned man, Joe Terranova, back in 2009. We hope, for Simon's sake, that he takes this opportunity, to finally get his act straight.
Evidence A: Hobbs as a sane, rational human being. Obviously here he is new to CNBC New York
Hobbs: “This is an overbought, inflated market, that could come down quite rapidly. Question, when you say buy JP Morgan to these guys at home, retail investors often last into the game, will they get out in time?”
Najarian: “They don’t have to, that’s the beauty of it. For the folks who don’t have any education on options whatsoever, that’s why you gotta have that education. That’s why it’s an explosive world. And that’s why it traded 27 million contracts and sets records almost every single day……[skip worthless babble]….You can buy JP Morgan at the cheapest level in two years. That’s why you can still buy this market.”
Terranova: “Hey Simon now that you are here in the US, listen, you have to be a bit of a cheerleader. There’s gotta be something that you’re in the heart of capitalism that you like about America. What’s the one thing, if you were investing, that you would buy right now. You’re here on US soil, there’s gotta be something good that we do here."
Evidence B: Hobbs as a CNBC programmed propagandathon
Pento: How can the Fed create demand? The consumer is still in full deleverage mode, the savings rate should go much, much higher. Companies are hording cash because the money markets got completely frozen in 2008.That's why they are hoarding cash and they are doing it because they believe they see another credit crisis down the road.
Hobbs: That's irrational.
Pento: It's very rational because the next credit crisis will be a sovereign credit crisis and will be about 3 years away.
Hobbs: I am not sure it is rational.
Pento: Ok, 30-50% of all federal tax revenue will go to pay interest on the debt in 2018. China is slowing, Europe is slowing, they have embraced austerity thank god. The US has yet to embrace austerity that's coming too down the road.
Hobbs: What is in the long-term interest of those companies?
Pento: You want them to spend money, hire people, buy capital goods when there is no final demand? Nominal household debt now stands at 92% of GDP. Households have a lot of deleveraging ahead of them, so they are not going to spend money if there is no final demand.
Hobbs: Do you not think the consumer will have turned tail in a year's time?
Hobbs: That's a very serious judgment.
Pento: Household debt will turn when they sell assets and pay down debt. That takes years.
Hobbs: Are you writing off the American economy for years?
Pento: I am
Hobbs: That's a huge thing to say.
Pento: We have bailed out the private sector by seriously endangering the public sector.
Hobbs: I think you are wrong. The AAA rating will always stay in this country.
Pento: The AAA rating held for Enron too and CDOs but they still collapsed.
Hobbs: But the American government can always tax people more. It can always pay its bills.
Pento: If you can raise taxes to 100% does that mean you are going to raise revenue.
Hobbs: Nonsense. That's a political view. America will always be able to pay its bills.
Pento: How do you know that? Because the bond vigilantes will always be sleeping?
Hobbs: You are just peddling the power of nightmares.
Pento: That's what people told me in 2006 about the housing market. The housing market can never decline... But it brought down the entire global economy, Mr. Hobbs.
All we can says is that the power is strong with the CNBC Goebbels crew. Full must watch clip:
As for Mr. Gross analysis in Newsweek that a $1 trillion deficit is the single greatest thing the economy can experience, we will have a proper retort shortly. Although one wonders what the point is - by Mr. Gross' "logic", the only thing better than a $1 trilliion deficit, is a $10 trillion one... not to mention $1 quadrillion. Somehow we think not even Krugman would buy such drivel.