Ringmasters of the Financial Circus

Inside Wall Street's Game of Money, Media, and Manipulation

By Howard Kurtz
Free Press -- 326pp -- $26

The stock market is the hottest soap opera of our time. It gets top billing at cable networks, newspapers, and talk shows. The coverage has helped fuel a sharp rise in equity ownership: 48% of the U.S. population now owns stock, up from 32% just 10 years ago. The media have made celebrities of once-obscure Wall Street analysts and plugged Internet company CEOs. But the most influential stock-market stokers may be the media's own cast of characters: financial journalists. Howard Kurtz, media reporter for The Washington Post, takes us inside their glitzy yet often suspect world in his spirited, gossipy The Fortune Tellers.

The volume is not strictly a media tale. Kurtz takes note of such celebrity analysts as Henry Blodget, of Merrill Lynch & Co., and Kim Polese, the flashy CEO of software maker Marimba Inc. But at heart, this is an enthusiastic chronicle of the explosion in celebrity-financial journalism. It illuminates conflicts of interest, where ''scoop-hungry reporters rarely question whether the gurus they cover are right or wrong.'' Yet it acknowledges some as bona fide newsmakers as well as reporters. And, in chapters that may fascinate financial-news junkies but try others' patience, it elevates newsroom chitchat to the status of legend. Wonder why CNBC's Ron Insana stopped wearing a toupee? Or why's James Cramer and his wife sought marriage counseling? It's all in Kurtz's account.

The author offers up mini-morality plays starring, among others, Cramer, former CNN Moneyline chieftain Lou Dobbs, and irreverent wisecrackers Mark Haines and David Faber from CNBC's Squawk Box. Then there are columnists such as this magazine's Gene G. Marcial, who reports the buzz on Wall Street and moves the market. (Even this reviewer is mentioned, having written an article that Kurtz says obstructed a potential buyout of

Television executives didn't envisage much of an audience for business news until the early 1970s, when NBC's Irving R. Levine began reporting on wage and price controls and oil embargoes. In 1979, PBS launched Wall Street Week with Louis Rukeyser. CNN followed with Moneyline in 1980. Then came the Financial News Network, the first with all-day business coverage. CNBC began in 1989, and in 1995, CNN Financial News (CNNfn). The emergence of the explosion of the Web in the '90s, coupled with the longest bull market ever, begat do-it-yourself investing. Internet news outlets sprang up, personal-finance magazines multiplied, and eyeballs got glued to the likes of CNBC, where viewership has more than doubled in the past three years.

CNBC succeeded, Kurtz says, thanks to the formula of its former president, Roger Ailes, which emphasized broadcasters' personalities. ''Money Honey'' Maria Bartiromo, for example, would be cited by none other than People magazine for her ''Sophia Loren looks.'' As a rookie at CNBC, she made her name reporting from the frenzied floor of the New York Stock Exchange. No mere talking head, Bartiromo would, between takes, call brokerage sources and reveal to TV audiences which stock analysts were upgrading or downgrading. Then she won the plum job as co-host of CNBC's Business Center, a show designed to compete with CNN's Moneyline. This required little more than anchoring and chat, and Bartiromo found herself out of her element. Indeed, during her 20-month tenure at Business Center, Moneyline's ratings were five or six times higher. In June, 1999, CNBC abruptly pulled her, and she went back to focusing on the market. Business Center, now hosted by Sue Herera and Ron Insana, is trouncing Moneyline.

Meanwhile, Kurtz reminds us, CNNfn was having growing pains. The channel has always trailed CNBC in the ratings. Lou Dobbs, then CNNfn's president, had had numerous run-ins with his Atlanta bosses. Once, he even revealed his pique on the air, brusquely announcing that the network was interrupting his show to cut to a speech by President Clinton. Finally, Dobbs resigned to launch his own Web site. The timing wasn't bad, as large losses at CNNfn would soon demonstrate. Without Dobbs, Moneyline's ratings have dropped.

Then there are the ups and downs of James Cramer. Kurtz reveals how, earlier this year, Cramer wanted to escape from his low-rated Show on the Fox network and return to CNBC's Squawk Box, which had made him a star. As Kurtz tells it, Cramer delivered an unintentional coup de grâce with his on-air plug for's stock, in which he was the largest stockholder. Fox publicly chastised Cramer. Feeling they had been unfairly reprimanded,'s executives canceled the show, and Fox followed with a breach-of-contract lawsuit. Now, Cramer was free to return to CNBC--except that, after all of his shenanigans, CNBC wasn't calling.

It's not until the end of The Fortune Tellers that Kurtz gets around to his stated purpose: warning investors about the celebrity financial-journalism machine. By then it seems a bit of an afterthought, suggesting that the book is more about celebrating the celebrated than inveighing against them. Yet Kurtz does do an impressive job of penetrating the rumors, hidden alliances, and cutthroat competition that drives financial news. And for market junkies, that's reason enough to pick up his book.


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Ringmasters of the Financial Circus

PHOTO: Cover, ``The Fortune Tellers''

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