Some 'Splaining on the Crash Call; Some Apologizing on Steve Frank

The Call

NEW YORK -- On TheStreet.com's television show on Fox News Channel this weekend -- you DID watch, didn't you? -- I made a "naked" prediction about a "scary" day coming by summer's end.

Unfortunately, the show ended before I had a chance to 'splain myself. Fortunately, this column provides me an opportunity to do just that.

The prediction was based on a belief investors have too quickly overcome the "fear" -- however much existed -- during the "correction" from the mid-July highs. Yes, I know there was mucho pain, especially among Internet investors, but the Nasdaq Comp was the only "major" average to suffer a true correction -- a more than 10% decline from its all-time high.

Meanwhile, if the dot-coms are as dead as Jim Cramer says, how is it TheStreet.com Internet Sector index is still up 37% year-to-date? Sure, the DOT is down considerably from its high (29%, to be exact) but if the Net "bubble" did burst, it did so in a forest and, whatta you know, nobody heard it.

Meanwhile, recent economic data has some market players talking unabashedly about how the Federal Reserve will not raise interest rates at its Aug. 24 meeting.

Donald Ratajczak of Georgia State University told CNBC as much today, and both John Ryding of Bear Stearns and Frank La Salla of BHF Securities said the same on Neil Cavuto's show on Fox this weekend. La Salla and Ryding reiterated those views today, as reported in the Market Roundup.

Ryding noted both San Francisco Fed President Robert Parry and Dallas Fed President Robert McTeer have talked about the "wiggles" in the second-quarter ECI report, the highest since 1991. "It's too soon to know if the labor cost data mark the beginning of a trend," Ryding said.

Still, Alan Greenspan singled out labor costs as the greatest inflationary threat during his Humphrey-Hawkins testimony. That -- and the fact the fed funds futures market still says there's more than a 90% chance -- leads me to believe the Fed will hike next week, and those who say otherwise are leading investors down the primrose path. (I'm proud to report the Invisible Mouth is on my side -- at least on this issue.)

Momentum is a terrible thing to waste, so there's no telling how much farther averages can travel. But at some point (soon), investors are going to have a moment of clarity and realize the recent advance hasn't been supported by volume or breadth, much less fundamentals. Couple that with an acknowledgment the Fed IS going to tighten next week, or maybe with the actual occurrence, and you have the makings of a juicy decline. (Add vodka or rum to suit your tastes.)

The Trader

Then there's Cramer, who's an easy target not because he's on vacation, but because he's an open book. As such, he's often a good proxy of what the "pros" are thinking, right or wrong.

On the TV show, he was downright giddy about the market in general and Intel (INTC Quote) in particular.

Intel has "the momentum," JJC said, and will carry the market forward on its back (which isn't easy unless you're a yogi master).

A quick look at the accompanying chart shows the time to get bullish on Intel was about three months ago.

A Good Late-May Buy Intel, six months

Back then, on May 29 to be precise, Cramer made the following observation: "Until we discover new leadership, these two circus bug pretenders [Intel and Pfizer (PFE Quote), that is] will continue to let us down. They just don't have the juice right now. And we are asking them to do too much for us."

By July 14, Cramer was beginning to warm up to the chip giant. But as recently as Aug. 11 he was lamenting, "I wish I owned more Intel."

So NOW he's agog about the chip colossus? Methinks his unabashed optimism now will prove as WRONG! as was his skepticism last spring. About both Intel and the bigger picture.

The Special

Staff reporter Caroline Humer, who's been tearing it up of late on the online brokerage beat, gets the nod today for E*Trade-Instinet Pact Opens After-Hours Club to the Little Guys.

The Apology

Sincerest regrets to Steve Frank (and my loyal readers). Seems I was the victim of a ruse; those comments posted Friday were NOT from the CNBC reporter but from an imposter.

I wish to thank the ever-so-clever emailer for allowing me to learn a valuable lesson on this issue vs. on a more "hard news" story.

Which brings me to the point raised by several readers: Why do I bother?

My "interest" stems mainly from the fact CNBC has become THE financial television news authority and it seems nobody else in the press (financial or otherwise) has the inclination or interest to hold it accountable.

Surely, when CNBC is good, it's good, and you can't afford to miss out because it does move markets. The "problem" is CNBC could/should be better and seems too often focused on fluff -- like the latest hoopla about "Business Center" airing from the NYSE after hours. Maybe it's unfair to single out individuals -- some of whom I gather are unhappy in their current roles -- but the network's anchors have -- by fate or design -- become part of the market, rather than just observers of it.

That being the case, it behooves TheStreet.com readers to have CNBC at its best, not simply plugging anchors into different time slots (or any slot, for that matter) just because they're good at reading a TelePrompTer. Believe it or not, helping YOU is the raison d'etre for this column, although it's not always as obvious as "So-and-so says buy XYZ."

Also, I'm trying to help us all lighten up. Nobody on Wall Street is searching for the cure for cancer, unless -- of course -- they think they can make a buck on it.

PS

Say what you will about CNBC's competitors, they are but gnats on the fleas on the mole on the network's behind. With Lou Dobbs having taken the Space.com exit and more recent news of Executive Vice President David Bohrman's firing, rumors are afoot CNNfn's days as an ongoing concern are numbered. That CNN is airing more of fn's programming is only furthering the admittedly unsubstantiated scuttlebutt.

CNNfn's spokesperson was unavailable to comment, but CNN officials have repeatedly assured the CNNfn staff and the press at large that the parent network's commitment to the financial net is unwavering.