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The Santelli-Liesman Pay-Per-View Preview Redux

Tyler Durden's picture


Some have asked us what is the reason for the earlier poll asking who is more trustworthy: Liesman or Santelli. The following clip from earlier this morning should explain it. First Liesman points out "there is a point in time when ignorance goes from being amusing to being dangerous, and I think Rick's crossed that point long ago" Next, all hell break loose.



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Mon, 03/15/2010 - 10:33 | 265767 Fish Gone Bad
Fish Gone Bad's picture

Intelligence has its limits. Stupidity is boundless.

Mon, 03/15/2010 - 10:56 | 265769 Fish Gone Bad
Fish Gone Bad's picture


Mon, 03/15/2010 - 10:39 | 265770 Anonymous
Anonymous's picture

Hahhah, pissing contest by two fairly frustrated people.

Good fun.

Mon, 03/15/2010 - 10:59 | 265777 monmick
monmick's picture

Laughter is a very powerful tool. Santelli just proved that this morning.

Chinese university students did so about one year ago...

Mon, 03/15/2010 - 14:37 | 266052 carbonmutant
carbonmutant's picture


Mon, 03/15/2010 - 10:57 | 265779 Ivanovich
Ivanovich's picture

Santelli is awesome.

Tue, 03/16/2010 - 17:55 | 267794 berlinjames02
berlinjames02's picture

Who's has the better track record? Who cares? I wouldn't listen to either of those guys for advice! For better or worse... DYODDoo.

Regardless, Santelli hits the nail on the head about government debt and the backward looking bias of the Fed, analysts, economists, etc. As the Oppenheimer guy says, "[The market] is not accurate day by day... What's accurate is what we can look back on 10 years from now. There can be technical imbalances but it's the single best but imperfect..."

And there you have it. This is why I believe we will have INFLATION rather than deflation. With the Fed/Treasury driving the car looking out the back window, we're doomed. Fortunately the bias is only in one direction.

Mon, 03/15/2010 - 10:58 | 265780 Jesse
Jesse's picture


CNBC is only concerned about three issues: Ratings, Ratings, Ratings.

Jerry. Jerry. Jerry. Jerry.


Mon, 03/15/2010 - 10:59 | 265784 monmick
monmick's picture

Who is Jerry?


Mon, 03/15/2010 - 17:42 | 266325 xenophobe51
xenophobe51's picture

Jerry Springer.

Mon, 03/15/2010 - 10:58 | 265782 Dehrow
Dehrow's picture

Liesman gets pwned.

Mon, 03/15/2010 - 10:59 | 265785 Jean Valjean
Jean Valjean's picture

Liesman didn't like being laughed at did he.  Kinda reminds me of Geithner in China.

Mon, 03/15/2010 - 11:00 | 265788 assumptionblindness
assumptionblindness's picture

The look on Becky's face was PRICELESS!

Mon, 03/15/2010 - 11:02 | 265789 assumptionblindness
assumptionblindness's picture

Who wants to bet that we will probably see Santelli over at FOX soon?

Mon, 03/15/2010 - 11:05 | 265795 Cursive
Cursive's picture

Anything to drop CNBS ratings even more.  I haven't watched CNBC since Fall 2008.  I think some people only watch for Santelli and maybe Art Cashin.

Mon, 03/15/2010 - 16:36 | 266239 Pladizow
Pladizow's picture

Where's Gasparino?

Perhaps ironing out a Fox Contract before the release of his second Book?

Mon, 03/15/2010 - 20:01 | 266536 FEDbuster
FEDbuster's picture

He is already at FOX Business Channel.  I think Santelli should join him.

Mon, 03/15/2010 - 11:02 | 265790 Double down
Double down's picture

There are certain mistakes only intelligent people can make.  Grit sometimes seems wise. 

Trust the trader 

Go Rick!!! 


Mon, 03/15/2010 - 13:12 | 265791 doggis
doggis's picture

liesman has been a mouthpiece for the federal reserve and the treasury for too long. liesman greatly lacks something rick santelli has in abundance - integrity. liesman, you are a sorry excuse for an academic and journalist.

i trust rick santelli.

Mon, 03/15/2010 - 11:05 | 265796 Miles Kendig
Miles Kendig's picture

Oh, the drama!

Mon, 03/15/2010 - 12:30 | 265882 Howard_Beale
Howard_Beale's picture

Great Monday morning fodder. Must be time to use DH's new word. Liesman is a phuck-nut.

Mon, 03/15/2010 - 11:08 | 265798 Cursive
Cursive's picture

You don't even need an anagram generator to see lies-man for what he is


P.S. Steve, we know you constantly lurk here.  Good luck finding that think tank job once Comcast decides to pull the plug on CNBS.

Mon, 03/15/2010 - 11:08 | 265799 Leo Kolivakis
Leo Kolivakis's picture

Santelli needs to see my fathe rand brother (both psychiatrists) so he can adjust his meds. He is delusional. Didn't Jon Stewart ruin an shred of credibitlity he had left several months ago?

Mon, 03/15/2010 - 16:38 | 265819 frank
frank's picture

jon stewart doesn't have any credibility, as he is a comedian, and a failed one at that.

Mon, 03/15/2010 - 18:56 | 266453 Howard_Beale
Howard_Beale's picture


Mon, 03/15/2010 - 20:16 | 266557 frank
frank's picture

actually, i take it back. stewart does serve a purpose.

too bad he stole his entire attack on cnbc and cramer from don harrold.


Mon, 03/15/2010 - 11:27 | 265820 Lionhead
Lionhead's picture

Careful Leo, let he who is without sin cast the first stone. Your articles lately are beginning to show signs of manic-depressive behaviour. Maybe you might seek some professional help yourself. You are a case study of herd behaviour fear/greed.

Mon, 03/15/2010 - 11:27 | 265821 Jeff Lebowski
Jeff Lebowski's picture

Delusional.  Solar Power.

Perhaps you might want to sneak into the ol' medicine cabinet yourself.

Mon, 03/15/2010 - 11:44 | 265845 Lionhead
Lionhead's picture

It looks like Leo deleted his comment & this thread was shuttled under a different comment, Cursive's.  OK Leo, your game is up sir; now you are the one with no credibility or conviction. Your true colors are revealed. Thank you.

Mon, 03/15/2010 - 16:16 | 266194 Cognitive Dissonance
Cognitive Dissonance's picture


Your comment DID disappear there for awhile. I've noticed when ZH severs are backed up a bit, the comment section suffers and things become reordered or even lost for awhile. I suppose this is why they closed comments to anons.

Mon, 03/15/2010 - 11:13 | 265800 Cognitive Dissonance
Cognitive Dissonance's picture

Santelli says,

"I think that's terrific news. If you don't acknowledge you have a problem, you can't take the 12 financial steps to correct it..."

Liesman points out,

"there is a point in time when ignorance goes from being amusing to being dangerous, and I think Rick's crossed that point long ago."

If ever there were a time when both people might be right, this is it. From their own point of view, they are speaking truth.

Living-and-breathing-in-the-reality-of-the-trading-pits Santelli says that if the USA/World doesn't face reality soon, it will wake up in the gutter on the wrong side of town bleeding from various orifices and no knowledge or understanding how it got there or what to do next. You can only hold off the Devil for so long.

Perception-is-reality Ponzi Liesman says that since the dollar and all other world currencies were cut loose from any semblance of reality or control when Nixon and company abandoned sanity in 1971, the only thing keeping the world from waking in the gutter is perpetuating the mass illusion that the greenback you have in your wallet really does have value and is the best place to store your excess units of labor for your future retirement. To think otherwise is to be ignorant of this eventuality.

Since neither will get their wish, the only certain outcome is the gutter thingy.

Mon, 03/15/2010 - 11:10 | 265801 Gimp
Gimp's picture

At least Santelli tries to get reality out to the public. is just a "bag boy for the big boys downtown". Another clueless economist throwing darts at a board.

Oppenheimer fund manager ain't going to say anything to spook his customers, another ponzi scheme salesman.


Mon, 03/15/2010 - 12:30 | 265886 Howard_Beale
Howard_Beale's picture

Liesman is not an economist. He is an economics reporter. He has stated that many times.

Mon, 03/15/2010 - 11:23 | 265814 frank
frank's picture

i am shocked and amazed every time i hear liesman, and that they allow someone so incredbilty unaware to speak on cnbc so often.  doesn't say much for cnbc, does it...

Mon, 03/15/2010 - 15:09 | 266086 tenaciousj
tenaciousj's picture

Honestly, I just have to turn the channel whenever he starts running his mouth. 

Mon, 03/15/2010 - 11:25 | 265816 Gimp
Gimp's picture

Sums up CNBC nicely "incredible unaware".

Mon, 03/15/2010 - 11:25 | 265817 Gimp
Gimp's picture

Sorry, I meant "incredibly"

Mon, 03/15/2010 - 11:30 | 265825 Cognitive Dissonance
Cognitive Dissonance's picture


Do you realize that for "registered" ZH readers who leave comments, until someone replies to your comment, you can edit your own comment? That's why there is the "edit" button below your comment, which remains there until someone replies.

Mon, 03/15/2010 - 18:59 | 266458 Howard_Beale
Howard_Beale's picture

Who the phuck junked you? What is going on here!

Mon, 03/15/2010 - 21:31 | 266643 Miles Kendig
Miles Kendig's picture

You've missed all of this fun with one or more folks junking CD and some others, including me regardless of the comment... phucknuts love dear associate. 

Mon, 03/15/2010 - 11:28 | 265822 overmedicatedun...
overmedicatedundersexed's picture

Santelli knows the game at CNBC is close to an end..

Mon, 03/15/2010 - 11:38 | 265836 Grandpa Bear Hug
Grandpa Bear Hug's picture

Rick Santelli will likely be hauled in to the CNBC backroom for a cooling off period. As usual, he is not playing well with the cheerleaders and especially Steve "the Federal Reserve mouthpiece" Liesman.

Rick will be grounded or sent to his room for breaking the CNBC cardinal rule; "never disagree with a bullish equity fund snake oil salesperson" especially if Oppenheimer is the name.

Mon, 03/15/2010 - 11:40 | 265840 BS Inc.
BS Inc.'s picture

When we do our final tally of "who lost whom more money", do we get to include the inevitable tax increases the policies Liesman's been supporting in those losses? Cuz I know for damn sure that my taxes are going to go up more than they would have if we'd followed Santelli's ideas of letting the market decide who should get saved and who should fail.

So, on a "snapshot" view, Liesman might be ahead, but in the long-haul, my money's on Santelli.

Mon, 03/15/2010 - 11:52 | 265853 jesusonline
jesusonline's picture

Liesman has been kissing up to Bernanke long before the former was born. It's too funny now to watch him blow "Ha! you called credit crisis? you said credit crisis was nothing!" trumpet so that he goes red in the face. His idol Ben blew it, and we remember "subprime is contained" mantra all too well.

In that sense his "there is a point in time when ignorance goes from being amusing to being dangerous" is a desperate culpa-mea, an urgent need to self-flagellate. It's really him who long gone from simply amusing to becoming a first-rate peddler of 1984 kind of goods. "debt is new wealth, all hail Fed" like we don't hear that from CNBC daily.

His real name is Yuri by the way. So you go Yuri, kiss some more Federal Reserve A$$.

Mon, 03/15/2010 - 12:04 | 265857 glenlloyd
glenlloyd's picture

It always seems like Santelli's up against people who continue to pretend that nothing happened in '08, that our govt finances are not in horrible shape and that this economy is not built on sand. It's a sad sad day when this is the kind of rhetoric that we hear..then again it is CNBC.

Mon, 03/15/2010 - 12:29 | 265859 MarketTruth
MarketTruth's picture

People actually still watch CNBC?

If you watch CNBABCBS... what a fool believes!


Rick, if you are reading this leave CNBC immediately and go somewhere else. One day you may find yourself guilty through association, thus left high and dry. You are far too smart to stay in the proverbial burning down house.

Mon, 03/15/2010 - 12:12 | 265866 Cow
Cow's picture

How about the tool from Oppenheimer?  Government securities can be assessed by looking back 10 years?  CDS's aren't that helpful?  It doesn't matter that the US loses its AAA rating?

How does a person invest on a daily basis with that attitude?

Mon, 03/15/2010 - 12:13 | 265869 BlackBeard
BlackBeard's picture

well.   that was a whole lotta crazy!

Mon, 03/15/2010 - 12:17 | 265871 bigdad06
bigdad06's picture

Santelli needs his own show! CNBC needs to give him his own show or he needs to go to another network that will. Santelli is running rings around these clowns!

Mon, 03/15/2010 - 12:36 | 265895 Gordon Freeman
Gordon Freeman's picture

No, Santelli needs to write!  The last thing we need is more TV.

Repo Man says:  The more you watch TV, the less intelligent you are.

Mon, 03/15/2010 - 14:24 | 266039 crzyhun
crzyhun's picture

Estevez never acted better in his long life. Great flick. Stanton was great too.

CNBC keeps hittng deeper bottoms. Is that possible? SLies says too many cheap shots to stay sober and be respected. Santelli lost it too, I am afraid. Still the bout goes to RS on points.

Mon, 03/15/2010 - 12:36 | 265893 vs18
vs18's picture

Embarrassing for all involved imo.

Mon, 03/15/2010 - 12:37 | 265897 Flounder
Flounder's picture

Some have been claiming genius for the profits from the Mar 09 lows and the DXY rally, but...the EURUSD was once under $1 and the IXIC was once at 5000.  The 10 year return on the SPX is -18% ex dividends.

Mon, 03/15/2010 - 12:51 | 265919 cougar_w
cougar_w's picture

You would have lost less gambling the same money at Las Vegas, but had free drinks and chicks while doing it.

it stopped being "investing" a very long time ago.

Mon, 03/15/2010 - 12:39 | 265899 THE DORK OF CORK
THE DORK OF CORK's picture

This circus is only a mindfuck - I don't trust any of them.

Mon, 03/15/2010 - 12:41 | 265903 Gimp
Gimp's picture

Thanks CD for the heads-up on the "Edit button.

While I am here, Becky Quick was fun to watch as the cheerleader who was losing control of her squad. CNBC cannot be taken seriously, pure entertainment only.

And yes, you are correct is only a economics reporter NOT an economist so apolgizes all round to any actual economists I may have P.O'd.

Mon, 03/15/2010 - 12:47 | 265912 vs18
vs18's picture

The funniest thing about Liesman is that he is CNBC's "SENIOR" economics reporter... one seriously has to wonder how clueless those under him have got to be.

Mon, 03/15/2010 - 13:08 | 265932 Cognitive Dissonance
Cognitive Dissonance's picture

Unfortunately "Senior" has nothing to do with intelligence or knowledge and everything to do with who you know and how willing you are to subvert your own ethical and moral standards "for the greater good" whatever that may be.

It's an old game in any hierarchy, be it political, religious, corporate or social. Everyone conforms to some extent or another. Those who show the greatest zeal in conforming to the will of those above are promoted and given titles and pay commensurate to their level of whoring.

Mon, 03/15/2010 - 13:21 | 265945 vs18
vs18's picture

Yup, I agree and I feel like if you're going to take a pedagogal approach to reporting macroeconomic issues in that kind of pretentious way that Liesman does.... well then at least walk the walk. He doesn't even have any formal training or background in economics/finance. I feel like there is more credibility with reporters who have the background in the fields they report in, which is why I trust Rick's opinion (even though he's a complete blowhard) over Liesman's any day.

Mon, 03/15/2010 - 14:06 | 266011 Cognitive Dissonance
Cognitive Dissonance's picture

"I feel like there is more credibility with reporters who have the background in the fields they report in,..."

On the surface this makes sense. But if the "news organization" (a term I use extremely loosely) won't let the reporter report what's going on then what purpose is gained by having a credible reporter if that reporter is constrained and relegated to news "repeating" or "churnalism" at best?

I have come to believe that a more credible reporter simply enables me to accept the fantasy they're pushing more easily. While Rick does get wound up on occasion, he still basically stays within the lines. While he challenges Steve and a few guest from time to time, he remains a cheerleader on a cheerleading program. He's just more credible while doing so.

Mon, 03/15/2010 - 12:48 | 265915 cougar_w
cougar_w's picture

It's not about the truth folks.

It's about the game.

Even when it's an end-game it's still about the game. Even more so in fact. Steve and Rick are playerz in the same game and moving the ball forward on their own terms. But the game is nearly over and they are trying to put up a good show for the historians, who might eventually summarize the entire episode as "Steve said it was this way and Rick said it was some other way and they were  both wrong in the end."

Mon, 03/15/2010 - 12:49 | 265917 Aductor
Aductor's picture

Although I do share many of the concerns that Santelli expresses, I cannot understand the crowd worshipping him. He is just rude against pretty much anyone who happen to disagree with him, plain and simple. Did he have any traumatic memories from Kindergarten, or what is his problem?

Grow up Rick and argue like an adult. You have the arguments and facts, don't destroy it by acting lika a child.

Mon, 03/15/2010 - 13:01 | 265928 Hulk
Hulk's picture

It takes rude to blast through this level of idiocy, trust me.

No other way

Mon, 03/15/2010 - 12:52 | 265922 bluelou
bluelou's picture

I had to search for these names on Google.  I don't understand why anyone would waste their time watching TV journalists?  I just assumed only retail watched this stuff.  Am I missing out?

Mon, 03/15/2010 - 13:05 | 265930 Hulk
Hulk's picture

"Credit rating downgrade doesn't matter"

Liesman must of had Stiglitz as a professor...

Sounds very similiar to the crap Stiglitz was feeding Hendry

and with the same results. Laughter...

Mon, 03/15/2010 - 13:09 | 265935 Aductor
Aductor's picture

In a sense, he is right. Does anyone care anymore what the rating agencies say or do?

Mon, 03/15/2010 - 13:39 | 265965 Hulk
Hulk's picture

At least Santelli knows what the fuck he is talking about.

Liesman looks like he could be the idiot twin of Richard Trethewey,

plumber guy on "This old house"

Mon, 03/15/2010 - 14:11 | 266027 overmedicatedun...
overmedicatedundersexed's picture


spilled my coffee reading that hulk

Mon, 03/15/2010 - 20:29 | 266583 Hulk
Hulk's picture

hope it wasn't "through the nose"


Mon, 03/15/2010 - 14:56 | 266072 chumbawamba
chumbawamba's picture

No doubt, but Santelli apparently didn't learn the cardinal rule of debate:

Never argue with an idiot: he'll only drag you down to his level and beat you with experience.

I am Chumbawamba.

Mon, 03/15/2010 - 14:04 | 266013 Clinteastwood
Clinteastwood's picture


Why do you always hold back?  Just relax and tell us how you really feel.

Mon, 03/15/2010 - 14:45 | 266064 Cheeky Bastard
Cheeky Bastard's picture

I <3 U

Mon, 03/15/2010 - 13:31 | 265956 SteveNYC
SteveNYC's picture

This looks like the kind of "interaction" that goes on in most NYC offices, most days of the week, most of the day.


Completely, utterly, wasted time & energy. Productivity = zero.


I give Rick kudos though for calling them on their shit, go Rick.

Mon, 03/15/2010 - 13:36 | 265958 A Nanny Moose
A Nanny Moose's picture

ROFL. Liesman argues in favor of efficient markets, but only when it comes to pricing bonds. Orwellian media continues its mind control campaign.

Never mind that the black box ratings agencies have consistenly been wrong, or that nobody factors in the SSTF/MCTF/Everyother govt trust fund ponzi. Ratings agencies are a tentacle of the polit bureau.

Watch your 401K's






Mon, 03/15/2010 - 13:40 | 265968 brown_hornet
brown_hornet's picture

Always watch CNBS in the morning while downing my daily bowl of Raisin Nut Bran. Mostly for Santelli and Cashin. Just because one watches doesn't mean one believes. 

Also like El-Erian, who happened to be on right after the above grudge match. He seems to put complex issues into language that even a small money retail goofball like myself can understand.

The hardest I laughed in a few days was when Joe K was kidding El-Erian about moving to NY and choosing the loser Mets over the Yankees and the Jets over Giants and El-Erian asked Joe if that implied carryover to El-Erian choosing to be on CNBC.

Mon, 03/15/2010 - 13:43 | 265977 MickV
MickV's picture

Liesman--"those of us that trust markets". He is such a propagandist that it makes me physically ill. I hope that when all the springs come loose that Liesman is still on, so that Santelli can laugh at him.

Mon, 03/15/2010 - 14:45 | 266063 Lucy Loves Ricky
Lucy Loves Ricky's picture

Me too!

Mon, 03/15/2010 - 13:56 | 266001 Roy Bush
Roy Bush's picture

And who IS an economist you can trust?  From what I can tell you might as well rely on the stars or chicken-bones than rely on "economists"

Mon, 03/15/2010 - 21:21 | 266645 dnarby
dnarby's picture

Steve Keen, and anybody Keen respects.

Mon, 03/15/2010 - 13:56 | 266002 kengland
kengland's picture

Liesman pointing a finger? WTF! That closet Russian was screaming from the roof tops in 06 and 07 that sub prime wouldn't spill over. He never once mentioned off balance sheet troubles and routinley spouted the benefits of "diversifying risk" through CDO, CDS, and IRS.


When does the revolution take place? The Steve's of the world must be run through the streets! 

Mon, 03/15/2010 - 14:09 | 266008 Clinteastwood
Clinteastwood's picture

Steve Lies, man. Steveman lies. Man, Steve lies.

Mon, 03/15/2010 - 14:16 | 266029 Gimp
Gimp's picture

Never figured out why El-Erian wastes his time on CNBS,must be in his Pimco contract to push the company name. Not saying Bloomie is any better, they are both cheerleading squads.

Mon, 03/15/2010 - 14:27 | 266042 squizz824
squizz824's picture

Good theater!

Mon, 03/15/2010 - 14:42 | 266056 carbonmutant
carbonmutant's picture

Steve's job is to spin the numbers... the truth is irrelevant.

Mon, 03/15/2010 - 14:43 | 266058 Lucy Loves Ricky
Lucy Loves Ricky's picture

I hope Rick can hang in there with all the crap they put him through. He was the only one talking about AAA ratings being lowered, and it's todays headlines! Liesman needs to shut his face! For ONCE Joe wasn't instigating Rick. It would be nice if they would let us hear what Santelli has to say. If Liesman said that to someone in his studio, they would probally punch him- twice!! 

Mon, 03/15/2010 - 14:43 | 266059 Cheeky Bastard
Cheeky Bastard's picture

" The AAA rating doesn't matter"




Liesman, you stupid fuck ... the collateral call only would be in trillions if the US loses its AAA faux rating ...

Mon, 03/15/2010 - 15:13 | 266092 markar
markar's picture

that is why the whole thing will collapse before the ratings downgrade. Won't happen until it's meaningless

Mon, 03/15/2010 - 15:22 | 266101 Rick64
Rick64's picture

How about that comment by Santelli "What is accurate?" and Jerry's response "What we can look back on 10 yrs. ago" (how profound) then Erin "Rick are you arguing with the market"

 No wonder nobody wants to watch this crap.


Mon, 03/15/2010 - 15:33 | 266121 Camtender
Camtender's picture

Matt Taibbi & Mark Ames

Just before Christmas in 1997, as a tumultuous stock-market crisis ravaged emerging markets in every corner of the globe, readers of the Wall Street Journal were treated to some good news: Russia was going to emerge from the mess unscathed. While conceding that "few debt markets outside Southeast Asia were hit harder by recent financial turmoil than Russia's," the Journal's Moscow bureau chief, Steve Liesman, added quickly that "many analysts believe an equally strong rebound may be in the offing." Moreover, Liesman wrote, investors were rapidly coming to the realization that "Russia's problems are far different and, for the moment, less dire than those that undermined Asian economies." The December 16 piece was headlined, "Russian Debt Markets Due for Rebound." 

A few weeks later, Liesman and the Journal used even stronger language to trumpet Russia's economic merits. They chided investors who were too busy "fretting over Asia's financial crisis" to notice what they called "one of the decade's major economic events: the end of Russia's seven-year recession."


The Journal's prediction was more than a little precipitate. Instead of getting better, things in Russia got worse. A lot worse. Nine months after Liesman declared that Russia's debt market was due for a rebound, and just over seven months after proclaiming the end of the Russian recession, the Journal--like most US newspapers--found itself having to explain the near-total collapse of Russia's economy and capital markets.

What is most astonishing is not how badly Liesman and the Journal misreported one of the most tragic economic stories of the decade as it was happening. The amazing thing is that they won a Pulitzer Prize for their reporting of the Russian crisis after the country had gone down in flames. Liesman, who left the Moscow bureau in April of 1998 to return to New York, was called back to Moscow after the crisis to help write a series of Journal pieces on how the Russian financial collapse happened. These articles completely contradicted the body of work he had left behind, leaving the impression that the collapse had been inevitable all along.

While it's true that throughout the mid-nineties nearly the entire Western press corps had painted a similar picture of allegedly successful, if bumpy, market reform in Russia, the Wall Street Journal's version was even more deluded, and more inappropriately enthusiastic, than the competition's. Furthermore, few if any of those other outlets, with the possible exception of the New York Times, have as much influence internationally as the Journal. And none of those other reporters won the Pulitzer Prize. To win that, the Journal ought to have been ahead of the pack throughout; as it was, the paper's coverage only stood out as the most spectacular wreck in a huge pileup.

Liesman's Russia coverage was a case study in the kind of narrow colonialism and provincialism that is increasingly pervasive in American foreign news reportage. Until the crisis struck, Western reporters based in Moscow focused almost exclusively on the Russia story in terms of its relevance to Western businessmen--and as long as the stock market was doing well, and companies like British Petroleum were still proudly announcing mergers with Russian partners, much of the corruption that eventually sank the Russian economy was ignored. As a result, an event like the recent Bank of New York debacle actually came as something of a surprise to Americans. But for ordinary working Russians, a great many of whom have been watching their bosses send company money offshore for years while their own salaries go unpaid, the only surprise in the New York money-laundering story was that it didn't come out sooner. And one reason it didn't is that the Western press, particularly pro-"reform" cheerleaders like the Journal, was plainly uninterested, until it was far too late, in making an effort to see the corruption that was a daily reality for the majority of Russians.

In fact, until the crisis forced them to change their tune, Western reporters like Liesman seemed to distrust reports of widespread public despair over the Yeltsin regime's criminal policies, preferring instead to rely upon the stock market, the pronouncements of the IMF and the results of Russian state-produced macroeconomic reports to tell them how the Russian economy was doing. As journalists Matt Bivens and Jonas Bernstein wrote in an article in the academic journal Demokratizatsia, which criticized Western press performance (including that of the Wall Street Journal) in post-Communist Russia: "Sadly, there is another dynamic at work here, an element of disdain for the Russians as a people.... [Many] Westerners have sympathy for the idea that following centuries of oppression, the Russians 'aren't ready' to be trusted with complete democracy. Perhaps, then, it is better to let former Vice Premier Anatoly Chubais and his Harvard-trained whiz kids manipulate matters--always, of course, 'in the larger interest.'"

Liesman, 36, a bombastic, balding New Yorker whose amateur blues band played a few coolly received gigs in Moscow clubs in his early years here, is still well known in the Moscow press corps as a sort of caricature of a typical Moscow-based US correspondent--a loud presence at press conferences and a knee-jerk anti-Communist. Despite having lived in Russia since 1992, when he came to work for the English-language Moscow Times, Liesman was still using a translator in 1998, the year he left.

"I wasn't the only guy who was [working with a translator]," he said. "A lot of guys were doing that." When reminded that he was the only one of those "guys" who had won the Pulitzer Prize, he conceded, "Well, that's a point."

Like many of the more linguistically challenged members of the foreign press corps in Moscow, Liesman fell into the classic trap of making one small group of English-speaking Russian politicians his most trusted source of information. That clique--including privatization czar Chubais, early Prime Minister Yegor Gaidar and allies of theirs like onetime property chief Maxim Boycko--was often referred to by Russia observers as the "St. Petersburg Mafia" (most of the group came from the northern capital). This group sold itself to the Western press as the vanguard of the anti-Communist, pro-Western movement and nudged reporters like Liesman into portraying any criticism of their policies as aid to the Communist movement.

Liesman's unwillingness to report any negative news associated with the St. Petersburg Mafia first became glaringly obvious in early 1996, when he called privatization "the most successful and important of Russia's reforms." Part of the privatization effort that Liesman praised, the notorious "loans-for-shares" auctions, had just created a national scandal due to their overt criminality; it had forced loans-for-shares architect Chubais out of government. In these auctions of huge stakes in key Russian enterprises, Kremlin insiders decided the winners in advance, often helping out by padding their bids with government funds. These auctions instantly created a super-rich clique of monopolist "robber barons"--many of whom were much-vilified names in the US press this past summer, when they began appearing in connection with investigations into the Bank of New York scandal.

The criminality of these auctions was well detailed in the Russian- and English-language press: Izvestia, for instance, reported that $50 million in Ministry of Finance funds had been transferred to Bank Menatep before the latter won a huge stake in the oil company Yukos, and more than one paper noted the curious anomaly of two banks (Stolichny Bank and Menatep) guaranteeing each other's bids in a "competitive" auction for a stake in the oil company Sibneft. The winning bid in that auction was just $100.3 million, despite the fact that the company, which at the time produced more than 22 million tons of crude per year, was clearly worth a lot more. Most observers at the time believed that the sweeping victory by the Communists in the 1995 parliamentary elections was at least partly fueled by public disgust over these bogus auctions. And every sane observer recognized that the auctions represented a profound step away from the Western capitalist model. Even the cautiously neoliberal Moscow Times criticized the auctions in a December 30, 1995, editorial: "As more than one commentator has said, this isn't capitalism as the country ought to know it.... While it goes on, and there is no reason to think that it will stop, economic growth will be held back, and cronyism and cartels will prevent meritocracy and open markets."

Liesman didn't see it that way. His Journal coverage ignored the auctions' reported improprieties and dismissed their critics as Communists and political malcontents. In a February 7, 1996, article, for instance, he compared the criminal investigations into loans-for-shares to "show trials": "The [investigations] are at least partly political.... Some in Moscow's financial circles even anticipate show trials that would sacrifice a few privatization deals to mollify the opposition and save the rest of the program." In an interview for this article, Liesman said he believed, and still believes, that loans-for-shares was, relatively speaking, a success--or at least preferable to the alternatives. "It's in your opinion that [loans-for-shares] wasn't successful," he said. "To me, if you ask me, what was the alternative? Keeping it in state hands?" Liesman added, "Do I stand accused of being on the Chubais bandwagon? If so, I plead guilty. Just like the United States government, and just like every other expert we spoke to."

Unfortunately, none of the "experts" Liesman spoke to were ever very interested in advertising Russia's problems to the Western investors who read his paper. Ultimately, this was the key to the Journal's failure. While Western businessmen on the ground in Moscow saw the disaster of the Russian state in action--evident in their mass flight from Russia's capital markets beginning in late 1997--Journal readers abroad were taken completely by surprise when catastrophe struck. As late as June 1998, when Russia's capital markets teetered on the edge of collapse and worker protests over nonpayment of wages paralyzed rail travel across the country, the Journal was still dismissing Russia's troubles as fallout from a few logistical glitches. In a June 5 article, Liesman argued that the crisis had its roots at least partially in a scheduling blunder by one of then-Prime Minister Sergei Kiriyenko's underlings:


Moscow--In the story of how Russia's markets collapsed in May, give at least a couple of paragraphs to a simple mistake by a provincial government aide.
      It happened that Lawrence Summers...requested a meeting with Prime Minister Sergei Kiriyenko. But an aide to the youthful new prime minister...knew only that this Mr. Summers was a deputy secretary of the treasury--a title unworthy of an audience with a Russian prime minister.
      Word leaked out that the two had failed to meet.... Over the next two weeks, a bad situation worsened, as ruble-holders rushed to convert to dollars, stock prices plunged, and a near panic brought Russia to the brink.


At the time this article was written, Russia was experiencing major unrest. The last remaining investors were pulling out en masse, markets were collapsing and the debt bubble had grown so large that no new IMF loan could possibly save it. But Liesman, apparently eager to reassure his readers, attributed May's financial tremors mainly to PR gaffes--as well as the Asian financial crisis:


Until the most recent troubles in Asia--riots in Indonesia, more evidence of Japan's deep ennui, a nuclear race on the Indian subcontinent--Russia appeared to have escaped the ravages of the Asian monetary maelstrom. Its notoriously poor tax collection was improving. Economic data showed growth for the first time in seven years. Credit Suisse First Boston declared the country a buy. Boris Jordan, an American who has become one of the biggest players in Russia's stock market, went on vacation to Disney World.


Two things bear mentioning here. One is that before the crash, pro-reform journalists like Liesman often justified placing a positive spin on the Russian economy by noting that their sources in places like Credit Suisse were constantly pumping up Russia as a hot market. The brokers, the thinking goes, were the experts--so how could a reporter be remiss by trusting them? Answer: very easily. Any good business reporter knows that few stock analysts or brokers in emerging markets will go on the record as saying anything negative about their host country's economies--because if they do, no one will buy into its market. Asking a Credit Suisse trader in Moscow to be straight about the Russian market is like asking a Ford dealer to compare a Taurus with a Lexus honestly. Quoting analysts is fine to get the bright side of a story, but a responsible reporter looks for hard economic data for balance--and this is what was consistently missing from the Journal's coverage.

The second fact worth mentioning is that the Russian State Statistics Committee was notoriously unreliable. In fact, its chief, Yuri Yurkov, was fired for fudging statistics shortly after Liesman's June article appeared, news that went largely unreported in the Western press. In contrast, when the much-vilified anti-IMF president of Belarus, Alexander Lukashenko, announced a 10 percent rise in GDP for 1997, the news was greeted with widespread skepticism in the West. A Moscow Times story, for instance, was headlined "Belarus Growth a Question of Statistics" and speculated that Lukashenko might be "cooking the books." Russia got no such treatment in the reform era. The most revealing passage in the June article by Liesman was the line about Disney World. Thousands of people were sitting on train tracks to beg for their wages, and Liesman was writing about one rich American's plans to travel to Disney World.

Then again, lack of empathy for the plight of ordinary Russians was a consistent feature not only of Liesman's coverage but of US policy toward Russia in general. Like the IMF and the World Bank, both of which felt that Russia's need to pay their high-priced consultants was greater than its need to pay many of its "economically unnecessary" workers, Liesman revealed a concern for wage-earning Russians that extended only as far as their perceived utility in the service of global capitalism. When asked why he hadn't covered the nonpayment crisis, he replied: "Yeah, but nonpayment for what kind of labor?"

Mining coal?

"Coal that was needed, or not needed?" he snapped.

In that same June 5 article, Liesman also suggested that Russia might have been better off if it had been more corrupt, not less. "Another policy change also hurt," he wrote. "For years, the government had used commercial banks to pay its bills. Last year, it moved to a US-style treasury system, with branches of its own. The change saved money, reduced corruption and made payments more timely. But an unforeseen result was a fall in the cash moving through banks--money that these banks once used to play the government bond market.

"So when the crunch hit, the Russian banks couldn't help."

Liesman wasn't the only major-market bureau chief to blow the Russia story. The Washington Post and the Los Angeles Times both described Chubais as a "lightning rod" for unfair criticism when he was fired, downplaying or ignoring the many scandals he'd been linked to. Business Week wrote a glowing profile of banker Vladimir Potanin after he had been linked to an apparent bribe of officials in charge of a major auction Potanin had just won. In fact, most of the Western press, like the US government, got the Russia story wrong before the crash; as Liesman said, most of them really were on the Chubais/reform bandwagon right up until the August crash, when the position became untenable. In a 1995 article for the New York Times, John Lloyd, onetime Moscow bureau chief of London's Financial Times, dismissed as "facile pessimism" claims that Russia was sinking into a quagmire. Like Liesman, he would eventually change his tune, writing a much-ballyhooed eulogy of the Russian reform effort in the New York Times Magazine this past summer that railed theatrically against the corruption in the Yeltsin regime. In that article Lloyd even denounced the loans-for-shares auctions as acts of "colossal criminality"--language far stronger than he had ever used when privatization was actually taking place.

Liesman was replaced by Andrew Higgins in July 1998, but he returned to Moscow in August to participate in the writing of a series of articles explaining how the crisis had unfolded. Apparently realizing he was on to a Pulitzer-caliber story, Liesman backed off every position he had taken in the previous two years and enthusiastically volunteered the new conventional wisdom: that the fundamentals for an Asia-plus meltdown had been there all along. In a prizewinning September 23 article co-written with Higgins, Liesman recounted grotesque anecdotes illustrating how Russia's crony capitalism was one of the fundamental reasons behind the country's collapse, concluding: "All the while, the government was going broke. It couldn't collect the taxes it needed to pay its bills. So it built a rickety structure of domestic and foreign debt, creating the pyramid that collapsed in August and pushed Russia into default."

What about loans-for-shares, which Liesman had lumped in with "the most successful and important of Russia's reforms"? At the time, he had dismissed critics of the auctions as Communists. But in preparation for the Pulitzer ball, Liesman and Higgins sneered that only a fool could have missed the overt criminality of the auctions:


Desperate for cash, the government mortgaged some of its most lucrative assets for a fraction of their real value in return for loans from a handful of bankers. Meeting in secret, they carved up the spoils. Government bureaucrats colluded in the so-called loans-for-shares deals, allowing ownership of the stock-in-trust to be awarded at rigged auctions.
      There wasn't even a semblance of propriety. At a news conference in 1996, a Menatep executive could hardly contain his laughter when he claimed, implausibly, that he didn't know who owned the subsidiary that had just bought Yukos, Russia's second-biggest oil company. Russian journalists, served cognac by the bank's staff, guffawed in disbelief. Menatep had run the auction and the bank, it would later disclose, controlled the firm that entered the winning bid.


None of the above, or even a hint of it, was in Liesman's coverage of loans-for-shares when the story first happened. And none of it was new news.

Pulitzer candidates, like defendants in murder trials, are ostensibly judged by what they did, not by who they are--character and past behavior theoretically being irrelevant to the jury's decision. In this case, Liesman, Higgins and the four other Journal staffers who won were judged by what they did in ten post-crisis articles, written between June and December of 1998.

But there are times when who a journalist is and what he does coincide. The record shows that Liesman's bureau was little more than a PR conduit for a corrupt regime, consistently averting its eyes from the ugly truth. It cleaned up its act just in time to win the most coveted award in American journalism. The Pulitzer committee, as a body composed of journalism experts, either knew of the Journal's past record and chose to ignore it, or was negligently unaware of the Journal's body of work on Russia. If the former is true, it's time to stop taking the Pulitzer Prize seriously as a standard-setter for the journalism profession. If the latter, the board should reconsider its award.

Mon, 03/15/2010 - 15:44 | 266136 overmedicatedun...
overmedicatedundersexed's picture

""All the while, the government was going broke. It couldn't collect the taxes it needed to pay its bills. So it built a rickety structure of domestic and foreign debt, creating the pyramid that collapsed in August and pushed Russia into default.""

hmmm where am I seeing this again, but no

it's TBTF.

thanks for the back-round on liesman, as usual ZH reports the real world.

Mon, 03/15/2010 - 15:51 | 266148 Gimp
Gimp's picture


"The record shows that Liesman's bureau was little more than a PR conduit for a corrupt regime, consistently averting its eyes from the ugly truth."

Replace bureau for CNBC...nuff sed.

Mon, 03/15/2010 - 16:11 | 266184 johngaltfla
johngaltfla's picture

Liesman is the best Soviet economist on Bubblevision's staff.

Mon, 03/15/2010 - 16:28 | 266218 Pinefox
Pinefox's picture

Santelli tells it like it is.  He has to raise his voice because no one lets him complete a sentence. Once he gets riled, he does the same thing. Santelli doesn't have an agenda except to set forth the facts. He's in the pits so CNBC is just a gig for him, fortunately for us.

Mon, 03/15/2010 - 17:21 | 266293 jesusfreakinco
jesusfreakinco's picture

Sanetelli rocks.  Lieseman is a total idiot.   Need I say more?


Mon, 03/15/2010 - 18:49 | 266444 farmjohnny
farmjohnny's picture

Never try to teach a pig to sing, it wastes your time and it annoys the pig.

Mon, 03/15/2010 - 23:00 | 266753 Zender67
Zender67's picture

Rick Santelli for Congress, or the FED, or Fox News Channel!

Thu, 04/15/2010 - 08:27 | 301648 mark456
mark456's picture

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Sun, 06/05/2011 - 08:30 | 1340930 sun1
sun1's picture

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