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JEFF MACKE

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Jeff Macke, host of “Breakout” on Yahoo Finance, talks with the Opportunist’s Managing Editor Leslie Stone about how he got into financial journalism, what it was like to cover the financial crisis and what he believes will be the biggest financial news of 2014.

After successfully running Macke Asset Management in San Francisco for seven years, Jeff Macke found himself semi-retired at age 35—and growing bored. “Retirement is a horrible goal,” he says. “I needed a challenge within finance that didn’t revolve around making rich people richer. The wealthy have plenty of financial advisors looking out for their best interests but there aren’t that many people really trying to defend Main Street investors from the predators.”

He had been writing for TheStreet.com, MarketWatch and The Motley Fool while still at the hedge fund, and quickly became sought after for his knowledge of the markets. “Once I started doing CNBC I was hooked on doing television and video,” he says. “At the time financial television in general wasn’t full of particularly insightful commentary from people who had really been in the pits making money—Jim Cramer was one of the few guys who actually traded his own stuff—but I was intrigued by the marketing opportunity and the chance to give consumers something beyond buy, sell or hold advice.”

Macke was invited to join CNBC in 2006, and he became a pioneer member of “Fast Money” together with host Dylan Ratigan, Tim Strazzini, Guy Adami and Eric Bolling. Some credit him as the “voice of reason” during the defining moments of the financial crisis, due to his thought-provoking commentary and wisdom.

In 2011, Macke left “Fast Money” and teamed up with fellow CNBC alum Matt Nesto to host “Breakout,” an interactive investing show that features fresh segments throughout the trading day via the Yahoo website. He also writes a daily blog for Yahoo Finance. “I have been doing media and investing on the side for a while now and it’s a nice mix,” Macke adds. “The whole way the media reaches the masses is changing and places like Yahoo have a chance to form the new landscape.”

Macke’s book, Clash of the Financial Pundits: How the Media Influences Your Investment Decisions for Better or Worse will be released by McGraw-Hill in May, 2014.

Opportunist: What was it like to cover the financial crisis?

Jeff Macke: I compare it to going to a different house every night to tell them their dog just got run over. ‘Fast Money’ was on TV during the financial crisis and became sort of the unofficial-official show of the meltdown. The most volatile days were from Sept. 29 through Dec 1, 2008, and there were no rules—everything you thought you knew had been tossed out the window and you simply could not value anything. We were doing our best to interpret the news on the fly with only four traders and our host, Dylan Ratigan.

People were losing everything and we were trying to hold their hand through it all. Imagine having to tell people the GM stock they put away as a blue chip for retirement could literally disappear. A man came up to me and burst into tears telling me about his shares of Citi. There weren’t any easy answers to give him but trying to help America get through that time was a lot more gratifying than collecting fees running the hedge fund. It’s humbling. In financial news there’s a lot of chitchat, but every once in a while you’re reminded it can be very serious.

Opportunist: Please tell us about ‘Breakout.’

Jeff Macke: It’s a mix of lighthearted and entertaining and serious stuff. I always look at it from the perspective of trying to help other people. In the Internet environment we are hopefully seen as a voice of something resembling reason. Being online allows us to get through to the audience that needs us the most because people are actively coming to the site. They don’t have to wade through the Internet to find us.

Opportunist: What do you enjoy most about your work?

Jeff Macke: I love talking to smart people and reaching audiences day after day. I like to explore new ideas through my interviews, especially when markets get rocky. People don’t use financial media that much when the market is up because everyone is a genius. When the market is down they want our help and that always gives us something to do.

Opportunist: What is a typical day for you?

Jeff Macke: I’m up at 3:30 am, figuring out the markets and getting ready for the day.  Usually we’ll have interviews and meetings earlier in the day and I spend the afternoons looking for investments and blogging. I’m always in touch and always wired.

Opportunist: How do you spend your down time?

Jeff Macke: Hiding. [Laughs] I spend a lot of time with the kids—I have an 11-year-old girl and an 8-year-old boy— my greatest thrill is showing them the world. There isn’t anything on Earth better than showing your kids something wonderful for the first time. Over Christmas their mom and I took the kids to Rome and toured St. Peter’s and the Coliseum. Being able to share that with them while they’re young is an amazing gift.

Opportunist: The stock market just closed out the worst January since 2010. Why do you think that is?

Jeff Macke: The stock market has doubled since 2009 and there hasn’t even been an official ‘correction’ of 10 percent or more since 2011. The market isn’t horribly overpriced but there aren’t a lot of compelling values to be found at the moment.  This isn’t a selling stampede.  It’s an absence of buyers.  I think money will start coming in once we get into an official correction area.  I suspect the selling will go on for a while longer but I’m not seeing a huge bear market on the horizon.

Opportunist: Is Europe’s economy out of the woods, or do you predict future eurozone bailouts?

Jeff Macke: I don’t see an impending bailout being needed but I’ve been impressed by what they’ve been able to accomplish with the eurozone thus far. Europe has spent hundreds of years trying to strike a balance between unity and independence through treaties only to implode horribly. In that context simply surviving the worst of the Greek meltdown was a stunning achievement. Even the slight economic growth represents a minor triumph given the situation there just a few years ago.

Opportunist: The opposition movement in Ukraine doesn’t seem to be waning. Do you believe Ukraine will eventually integrate with the European Union?

Jeff Macke:  Revolutions are a process rather than an event.  No one knows better than Russia that having democracy isn’t the same as having popular representation.  Integration of Ukraine into the EU won’t happen until some sort of stability is achieved and that’s a long way off. Russia and the EU are playing tug of war with a hornet’s nest; I’m not sure it’s in either side’s best interest to take on the challenge of bringing order to Ukraine.

Opportunist: What do you believe will be this year’s biggest financial news story here in the states?

Jeff Macke: The reduction of QE—once the foot is off the gas pedal on the Fed side. That is the biggest unknown. We have begun dipping our toes back into the free market after a long time standing on the sidelines. The day has come to get back to the opportunity at the truth of the market, and the sooner the better.

The private sector has actually been doing the heavy lifting on the recovery.  Private sector payrolls are near an all-time high on an absolute basis.  That’s hard to believe but it’s true. Affordable Health Care is going to put that at risk.  Now that the CBO has admitted that as many as 2 million jobs could be lost the slack is going to have to get picked up somewhere. My concern is that the CBO is still underestimating the impact on employers.

Opportunist:  What will be the long-term effects, if any, of long-term QE?

Jeff Macke: I give Ben Bernanke a lot more credit than most people do.  He spent six years being the fall guy on stimulus even as he begged for help in the form of some reasonable clarity on the fiscal side. Quantitative Easing was an incredibly risky program but it hasn’t to be considered in the context of the global meltdown. Having spent his life studying the Depression Bernanke understood the dangers of taking off stimulus too fast better than congress. QE was put in place because Bernanke didn’t want to repeat the mistakes that led to the 1937 echo crash. QE is a terrible idea but it was the best idea anyone had at the time. Having just spent five years waiting for all that stimulus to trigger an inflationary spike that simply never happened it seems a little silly to pretend to know what taking off QE is going to lead to now. Bernanke’s legacy is that the Fed will do absolutely whatever it takes to ease the impact of going off QE. I’m more worried about elected officials than I am the Fed.

Opportunist: What are the major issues the United States is facing right now?

Jeff Macke: Besides the lack of any fiscal planning whatsoever and a President who is preemptively lame duck?  Complacency. After five years of a nice market rally everyone forgets what we came out of in 2008. I see it as a leadership problem. No one is really steering the ship. There are abstract notions of trying to fix things like income inequality, but that’s a big buzz phrase and no one is committed to seeing it change. It would be very good to see some proactivity instead of crisis management. We are presently in a terrible combination of laziness and being shell shocked about where we are. The midterm elections ought to be interesting.

Opportunist: Is the American Dream still attainable?

Jeff Macke: Absolutely! It helps to be born at the right place at the right time with the right skill set, but if you have some talent and work hard you can be successful. Upward mobility isn’t supposed to be easy. It never has been. As long as the country is at least a semi-free market the American Dream will exist in some form.  I just hope we can dream for better things than a pile of money and a big house. The dream should be making ends meet doing something you love.  That’s not the same as just having a huge stack of cash.

Opportunist: Please tell us about your book, Clash of the Financial Pundits: How the Media Influences Your Investment Decisions for Better or Worse.

Jeff Macke: Josh Brown [creator of The Reformed Broker, www.thereformedbroker.com] and I put it together as a way to help consumers of financial media understand what it is they’re watching.  I interviewed pundits in the business of helping investors really understand how Wall Street works in a useful way. It’s a huge responsibility to be invited into people’s homes night after night trying to help them navigate the stock market. I hadn’t seen anything in the market that really dove into what motivates people like Jim Cramer and Jim Rogers to come on television and offer their insights to the masses.  It’s not about selling books or marketing.  They’re really motivated by the desire to help the public in a fundamental way.  The book gives readers a chance to see what these guys are all about in a candid, behind the scenes way.  It’s how we talk to each other when the cameras aren’t watching.

Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in Florida. Follow her on Twitter at @les7989.

Follow Jeff Macke on Twitter @JeffMacke

Breakout on Yahoo Finance - http://finance.yahoo.com/blogs/breakout/

Jeff Macke’s Book: Clash of the Financial Pundits - http://www.amazon.com/Clash-Financial-Pundits-Influences-Investment/dp/0071817921

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