Rick Santelli of CNBC has called for a Chicago Tea Party, a revolt by taxpayers against a government stimulus package that may reward some irresponsible folks for their behavior. Jon Stewart invited him to appear on The Daily Show, but Santelli canceled. Hence, the Daily Show staff prepared a little tirade against Santelli and CNBC for missing the whole market implosion.

So much shouting! Of all the political revolutions coming out of Illinois right now, Santelli’s Tea Party is a strange one. Most folks in Cook County could take paying more in Federal taxes; we’re ticked off about the county board president, elected under questionable circumstances, finding great jobs for his relatives. The foreclosure rate here is relatively low, too, so it’s not like mortgage restructuring offends frugal Chicagoans the way they might upset the frugal in Phoenix.

Santelli covers the derivatives markets. With derivatives, there is a loser for every winner. Because many people buy derivatives as insurance, they are okay with taking small losses on the exchange instead of large losses outside of it. Hence, options and futures traders are no more affected by this market mess than they are by any other bit of news. Whether the news is good or bad, some win and some lose, and those who lose more than they win quit. It’s likely that Santelli and his friends on the floor aren’t suffering the losses that other investors are. I know some people who work at a futures trading firm here in Chicago, and they are so relaxed right now it’s almost scary.

But here’s what Stewart missed: CNBC is entertainment. Jim Cramer is a comedian. Rick Santelli is an actor. All financial news happens too fast for professional investors to rely on the media. If you read about it in the Wall Street Journal, it’s too late to make a trade; investors pay good money for Bloomberg boxes so that they can see the news as it happens. Small trading rooms will sometimes keep CNBC on in the background, more for the activity than for the insight, the same way that I like to go to sleep with the TV on when I’m alone.

But, but, but, you might be saying, some of the stock ideas from CNBC make big money! Of course they do. In theory, the investment markets are efficient. In theory, securities prices reflect the amount of risk that they have, so in theory, you could pick stocks by throwing darts at pages of the Wall Street Journal. (If you read the Journal online, you might want to use spitballs instead.) So, of course some stock pickers and some investment styles are going to be right on occasion. (more…)