CNBC has an unusual fan in Yale professor Robert Shiller. He's been on the air a couple of times, and recently he has spent some time watching. "Maria Bartiromo -- she's got excitement in her voice, doesn't she?" he says.
Shiller, 54, an economist, is bemused by most of what he sees on CNBC. "I'm watching as an economist," he says, the way that a physician might say, "I'm watching 'ER' as a doctor." "What strikes me is this tremendous focus on the short term," he says. "They've got quite an excited tone about all this breaking news, but the news isn't usually that important."
Shiller recently finished writing a book -- "Irrational Exuberance" (Princeton University Press, 2000). "I wrote it because I think that the market is in a speculative bubble. CNBC helps create that situation," he says. "I don't mean to say that the network's doing anything wrong; it is an impressive outfit. But intensive media coverage helps encourage optimism and speculative bubbles, and it provides a feedback mechanism. I don't think you could have that without something like CNBC."
Shiller has researched the overworked Dutch "tulip mania" comparison and has discovered an interesting historical note: "Newspapers first came to Holland in the early 1600s, just 10 or 20 years before tulip mania." In the 1600s, newspapers, of course, would have been the equivalent of CNBC. "I think they were probably reporting the tulip-mania phenomenon, don't you?"
With his disarming half smile, Joe Kernen motions toward the pair of telephones near his desk and says, "To me, a phone looks like a snake. I hate it. I try to stay off it."
He's not kidding. After MIT, Kernen worked as a retail stockbroker -- for E.F. Hutton, Lehman Brothers, and Merrill Lynch. "I made cold calls," he says, "hundreds and hundreds of them a day."
Now Kernen has created a job that allows him to sit in the vortex of the market's tornado -- as much as Maria Bartiromo or Bob Pisani (another CNBC correspondent who also covers the NYSE) do -- without ever having to pick up a phone or leave his desk.
Kernen sits just off the main set at CNBC, in what resembles a cockpit. He's surrounded by seven computers, each of which has a different function. Kernen's role is to watch stocks: What's going to move? What's already moving? Why? Every morning, two times an hour, he does a tag-team segment with David Faber that may be the most consistently funny, unscripted television anywhere. As the day unfolds, Kernen does a series of segments called "Winners and Losers" -- often picking out companies that don't have the visibility of indexed stocks.
In the purest sense, Kernen listens to the market with as little bias as possible. One of his computer screens displays lists of stocks: big-dollar movers, up and down; big price percentage movers, up and down; stocks with large numbers of shares being traded; and stocks with a large percentage of outstanding shares trading.
The clarity and precision that Kernen's computers provide can't be overstated. When Kernen plops down into his chair, his universe comes into focus on the roughly 9,100 stocks that trade each day. They can only go up or down; they can only trade heavily or not. News, therefore, becomes strikingly simple to assess. The market decides, the computers tote up the numbers, and Kernen reports.
That's the first half of Kernen's job: What has traders' attention? The second half: Why? Sometimes the market's "news" is driven by real news -- earnings, product announcements, executive changes, a stock split, a favorable or unfavorable story in the "Wall Street Journal." Sometimes a stock's movement is part of a wave that's lifting or battering a particular industry. Kernen has a half dozen news sources at his fingertips (plus the Internet, of course) and a full array of financial data and stock-price charts.
And as easy as it is for him to quantify his job -- "I try to mention every stock that moves more than 2% in a day" -- Kernen's value and popularity have more to do with his ability to explain what's happening with a company.
"I don't have any journalism training," says Kernen. "I do analysis and interpretation. It does involve a healthy dose of skepticism. But a lot of financial journalists seem to hate capitalism. It would be like having sportscasters who hate sports. I love capitalism."
Kernen's training as a molecular biologist taught him to ask questions; his nearly 10 years as a stockbroker (during the 1980s, a far more varied time in the life of the market) steeped him in companies as well as in markets. His shambling on-air style is real -- although it was a hard-won on-air persona. He started out as a writer at the old FNN (Financial News Network) -- "I used five-cent words instead of two-dollar words" -- and slowly migrated to the air. "I was on one minute a day, and the rest of the day -- all 23 hours and 59 minutes of it -- I spent worrying about that minute. Eventually, I got up to 2 minutes of airtime. I was still bad. I looked like a stone."
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