By Prince McLean

Published: 03:00 PM EST (12:00 PM PST)

Proving once again that the best way to reach Americans' brain is through their funny bone, Jon Stewart of the Daily Show continued his warpath aimed at irresponsible financial reporting by CNBC, specifically calling Jim Cramer out for his comments on how easy it was to profit from misinformation aimed at Apple.

Calling it "disingenuous at best and criminal at worst," Stewart grilled Cramer, the host of the frantic energetic "Mad Money" entertainment show, for his act of being "doe-eyed innocent" while celebrating the admittedly illegal shenanigans of hedge fund managers.

Stewart played clips of Cramer describing -- shortly before the iPhone was first announced -- how hedge fund managers could spread lies about the product through either gullible or willing media sources, creating either fear or excitement that would distort the company's stock, allowing the fund manager to profit.

Fomenting the market

In the clip filmed for The Street, Cramer notes that this practice of "fomenting the market" is "actually blatantly illegal, but when you have six days and your company may be in doubt because you are down, I think it is really important to foment." Cramer specifically cited the example of stirring up rumors that Apple's iPhone would be rejected by both AT&T and Verizon Wireless, and that it wouldn't be ready to demonstrate in time for Macworld in 2007.

Apple's stock performance leading up to the 2007 unveiling of the iPhone made it a prime candidate for foment and manipulation, as media figures spewing misinformation could easily cause temporary, panic-induced drops that manipulators could then use to profit dramatically from. Other companies, including Microsoft, had seen so little change in their stock price since the 2000 bubble popped that they simply couldn't be manipulated as easily.

Fomenting the market against Apple, however, "is very easy, because the people who write about Apple want that story. And you can claim that it is credible because you spoke to someone at Apple, because Apple isn’t in [a position to comment on unannounced products]. It is an ideal short."



Along with Apple, Cramer also cited RIM as a company that was easy to beat down with false information. "It might cost me $15 to $20 million to knock RIM down," he said, " but it would be fabulous because it would beleaguer all the moron longs [investing in RIM’s success]."

"Who cares about the fundamentals?" Cramer said, "Research in Motion just blew out the quarter. But look what people can do. That’s a fabulous thing. The great thing about the market is that it has nothing to do with the actual stocks."

"It’s important to get people talking about it as if something is wrong with RIM. Then you would call the [Wall Street] Journal and talk to the bozo reporter on Research in Motion and you would feed that Palm has got a killer it is going to give. These are the things that you must do on a day like today. And if you are not doing it, maybe you shouldn’t be in the game."

Cramer added, "I think it’s important for people to realize that the way that the market really works is to have that nexus of: hit the brokerage houses with a series of orders that can push it down, then leak it to the press, and then get it on CNBC; that’s also very important. And then you’ll have a vicious cycle down. It’s a pretty good game. It can be played for a percent or two."

Cramer vs Cramer: The Street and CNBC

While playing a comical character on CNBC, Cramer's articles and video clips on his own "The Street" website reveal an entirely different side. "When I watch that," Stewart said, "I can't tell you how angry that makes me. Because what it says to me is you all know, you all know what's going on [...] a game you know is going on but that you go on television as a financial network and pretend it isn’t happening."



The Street's War on Apple

Following the original iPhone pre-launch rumors Cramer talked about in The Street video clip, his site continued a merciless attack on the iPhone over the next year, including a "report" by Brett Arends which claimed that buying the iPhone would actually cost users $17,670, followed up by Arends' lists of reason not to buy it, many provided directly by industry flacks working for competing companies.

Cramer himself floated a false story immediately after the iPhone's launch that Apple's wireless partner Cingular (later renamed as AT&T) would provide a year and a half of free mobile service for the iPhone. The story was picked up by blogs and widely publicized on syndication sites like Digg. A myth busting report on the scam noted, "Saying that Cingular will give away $1440 worth of free service to perhaps ten million subscribers in order to earn just $480 from them across two years is an insane prediction."

The Street's Scott Moritz also served as a willing accomplice in filing dubious reports aimed at nailing Apple's stock, including the idea that Apple's spectacular launch weekend was actually disappointing because the company had really intended to ship a million units within three days, citing unnamed "whisper" sources.

In reality, legitimate analysts had actually expected Apple to ship 150,000 to 350,000 iPhones at launch; Apple reported selling 270,000 in the last two days of June quarter which made up most of the launch weekend. However, Moritz described a bleak scenario where Apple had failed to sell out its inventory, despite very constrained availability of the iPhone at most of Apple's 200 retail stores and many of AT&T's outlets over the first month. Because of this supposed failure to launch, Moritz insisted, "There’s a lot of rejoicing at Sprint, Verizon and T-Mobile."

The Street would also frequently take factual reports and add a hysterical, frantically panicked spin, sometimes to directly bring the stock down and other times to create impossible expectations invented to cause a temporary bubble. One suggested that Apple's AT&T revenue sharing deal was "unheard of," despite the fact that similar revenue sharing had long been underlying RIM's BlackBerry success. That provided Cramer with the timing to announce "I am being abject and adamant: Sell some Apple ahead of earnings."

Never mind the iPhone 3G: Steve Jobs is sick!

Last year, the Street continued badgering Apple, brushing aside the global launch of the iPhone 3G to try to focus coverage on Steve Jobs' health in a video segment titled "Without Steve Jobs, There is No Apple."

"This is a company that thrives on innovation, and the innovation is all being driven by one man.” Cramer said of Apple. “That’s okay, the one man is not a stock. I mean, you can’t. The multiple of one person is zero. Well, one. But I would warn people that this company… I don’t want to call it nothing without him, but it is not investible without him, because he is the driver of ideas. Now behind anybody there’ll be other ideas, but I remember the original Apple, and it was all him, too."

Cramer has largely been successful in spreading the meme that Apple is wholly dependent upon Jobs for its survival, but the idea that Apple's success has all been flowing all from the veins of one man is as absurd as the idea that the original Apple of the early 1980s did, too. "Jobs was regarded as a pariah in the business community, a maverick that drove down profits to advance technology and the state of the art. Had Cramer been anything of note in the mid 80s, he would have been slamming Apple for not acting quicker to rid itself of Jobs," a report on Cramer's take noted.