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Flashy Figures and Financial Facades: The CNBC Market Masquerade
“The ideal CNBC interviewee was "a former beauty queen who covered technology stocks, spoke in short sentences, and dated Donald Trump."
- John Cassidy, The New Yorker
Love it or hate it, CNBC has become an integral part of most US investors' lives. Yet there was a time before the financial network came into prominence.
It was during the frenetic dotcom bubble of the 1990s that CNBC truly came into its own. The station emerged as the go-to source for up-to-the-minute market news, commentary, and analysis.
CNBC’s Origin Story
CNBC's predecessor, the Financial News Network (FNN), launched in 1981 toward the end of a brutal bear market. With little public interest in investing at the time, FNN folded a decade later. Sensing a shift, NBC swooped in to fill the void.
The network founded the Commercial News and Business Channel (CNBC) in 1989, impeccable timing as the bull market took off.
As 401(k)s became mainstream, tens of millions of Americans began following the stock market. CNBC was there to meet their needs.
In the early days, CNBC's programming was dull as dishwater. Anchors presented lackluster shows on cooking and childrearing from behind card tables.
But in 1991, CNBC acquired the remains of FNN, including much of its talent. The fledgling network shortened its name and started gaining traction.
Enter Roger Ailes
CNBC's big break came in 1993 with the arrival of Roger Ailes, a master of television's emotional impact.
Ailes, no stranger to adversity himself, began analyzing TV while homebound as a child due to hemophilia. He majored in media studies and honed his skills locally before being hired to produce The Mike Douglas Show.
In an intriguing twist of fate, Ailes met Richard Nixon on set and insisted, "Television is not a gimmick." He soon became a media consultant for Republican presidents, helping spin Nixon as likable and George H.W. Bush as electable.
As CNBC's president, Ailes kept FNN's incessant stock ticker but otherwise overhauled programming. He added glitz-like voiceovers and tight anchor close-ups. Out went recipes and parenting tips; in came celebrity commentary from the likes of Geraldo Rivera.
Ailes insisted on framing executives to appear energetic and encouraged hyperbolic language like, "Don't touch that dial!"
CNBC reporters breathlessly narrated the trading action, while flashy corporate guests attracted viewers. The more flamboyant the guest, the better
As a New Yorker writer observed, the ideal CNBC interviewee was "a former beauty queen who covered technology stocks, spoke in short sentences, and dated Donald Trump." When unavailable, middle-aged men sufficed.
The Stock Market as Spectator Sport
Whenever I appeared on CNBC, I always wondered why all the producers had come from sports channels.
Now I know why.
Ailes promoted business news as a spectator sport.
One ad snarked that CNN forecast the weather while CNBC predicted if "you've still got a shirt.”
He also married sex and finance by promoting a new recruit from CNN, Maria Bartiromo, into an anchor position. With her passing resemblance to Sophia Loren, Brooklyn accent, and sex appeal, Bartiromo became the industry’s first “ Money Honey.
By the mid-1990s, CNBC spawned global affiliates and supplied 24/7 market drama. Ailes grasped that flashy entertainment attracted more viewers than dry analysis. The network provided mass audiences an intoxicating mix of market hype, internet tips, and broker plugs.
Ironically, CNBC failed its own investors.
Academic studies found stock prices spiked when CEOs appeared on air but then dropped soon after. Prices similarly rose and fell around stock picks on "Mad Money" hosted by Jim Cramer. It seemed some viewers were being played “like two-dollar banjos.”
Even worse, CNBC offered little scrutiny of optimistic corporate spin. Sycophantic anchors lobbed softballs at fraudsters like Enron’s Ken Lay. When companies laid off employees, CNBC lauded earnings reports with no concern for the human toll.
Astute CEOs like Jeff Bezos of Amazon dodged CNBC's obsession with short-term stock performance. Bezos granted serious journalists access but saw CNBC as a superficial distraction. He believed focusing on customers, not stock prices, ensured long-term prosperity.
By the late 1990s, CNBC had successfully transformed dry financial news into primetime entertainment. The network drew in viewers not through substantive reporting, but by casting Wall Street as a thrilling spectacle.
In the end, CNBC served its own commercial interests far more than those of the average American.
Its failure to provide a balanced perspective allowed market manias and frauds to flourish.
The network excelled at manufacturing market drama, but failed to impart the wisdom everyday investors desperately needed. And when the dot-com bubble inevitably burst, millions of credulous viewers were left with the bill.