‘Squawk On The Street’s’ David Faber On Breaking Finance News And The Gamification Of The Market

Every morning at 7:30, David Faber goes into his office at CNBC and makes a series of phone calls to CEOs, bankers, lawyers, senior finance executives and other major players in the world of finance and tech. 

He’s calling them to get a sense of what they’re thinking about on any given day and what corporate news is important to them so he can prepare for his show, Squawk on the Street, and he believes that physically making those calls is the key to successful journalism, even in these text-and-email-centric times. 

“For any call or conversation of substance, I don’t see how you can do it through text and email,” Faber said during a recent Walker Webcast. “It doesn’t let you understand how that answer sounded, the information presented around it and the key ability to ask follow-up questions.” 

Faber spent seven years at Institutional Investor magazine before joining CNBC in 1993. He co-hosts Squawk on the Street, which is broadcast live at the New York Stock Exchange and follows the first 90 minutes of Wall Street trading in the U.S., with Carl Quintanilla and Jim Cramer.

He has also hosted several documentaries, including The Age of Wal-Mart, for which he won a Peabody Award and an Alfred I. DuPont-Columbia University Award for Broadcast Journalism, and he has written three books: The Faber Report, And Then the Roof Caved In and House of Cards: The Origins of the Collapse. 

On this week’s Walker Webcast, Faber talked about his illustrious career, the challenges of reporting news that could change the market and the gamification of investing. 

Faber said that building up his range of sources in the telecom and media world took years of time and effort.

“One relationship leads to another and it doesn’t happen overnight, it builds and it takes years,” Faber said. 

He told a story about early on in his career with CNBC when he was covering the battle for Paramount. Famed media magnate Sumner Redstone and  IAC/InterActiveCorp Chairman and Senior Executive Barry Diller were fighting over who would get this $10B asset — and Faber had a lot to learn. He didn't know his way around a merger and acquisition situation like this one, but he did have some risk arbiter sources from his years covering banking, and they sent him in the right direction. 

“[Diller and Sumner] would not take my phone calls, back then you only talked to The Wall Street Journal, The New York Times and a handful of other journalists, but over time, as our network became more influential and I became someone people were familiar with, I was able to develop those relationships,” Faber said. 

The conversation shifted to a well-known interview Faber conducted with Alan Schwartz in 2008, who was serving as the CEO of Bear Stearns at the time, just days before the company was sold to JPMorgan Chase. Faber asked Schwartz about counterparty risk, and Schwartz, who had previously seemed confident, was left unprepared. 

Despite Schwartz’s unwillingness, or inability, to answer the question effectively, Faber had tried to help him.

“I knew this was an important question that he needed to answer well, and I would never give someone a question ahead of time, but I knew the gravity of the question and I did make it clear to him that this might come up and it’s the only time in my career I did that,” Faber said. 

This story led to a conversation about the implications of breaking major news, the kind that can change markets. Faber recognized that it’s a major responsibility and said the main thing he tries to do is always make sure he’s right — it’s what holds him back from doing stories other news sources might be comfortable reporting, because he needs to be 100% sure something makes sense to him. 

“It’s a hard, painstaking process and I still get upset about stories I should have pushed harder to report,” Faber said. 

Faber has been watching recent incidents that have shaken up the market, including the rise of AMC and Gamestop stocks as a result of a major push from internet groups. 

While Faber believes that Adam Aron, the chairman and CEO of AMC Entertainment Holdings, has done a smart job raising cash and steadying the AMC balance sheet since his stock has risen, he does not think this boom will last as it did for Netflix and other entertainment companies in the past, and he said AMC is likely not worth its current market value. 

“It’ll be very interesting to watch what happens,” Faber said. “This meme thing, I don’t know what to make of it, it’s the gamification of investing.” 

He added that the people he speaks to today are more concerned about inflation, and whether the Federal Reserve is putting the country in a bad spot or making the right decisions. 

“This is the key question, because it has broad ramifications,” Faber said. 

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This article was produced in collaboration between Walker & Dunlop and Studio B. Bisnow news staff was not involved in the production of this content.

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