“How the hell did we end up here, Mr. Cramer?” host Jon Stewart asked as CNBC financial guru James Cramer arrived on Comedy Central’s “The Daily Show” earlier this month.  “What happened?”

The question seemed to stun Cramer, who is rarely at a loss for words. But the reality was more painful: Last year, Cramer and his colleagues at CNBC, the popular business-oriented cable channel, didn’t know the stock market was going to tank. They didn’t predict it or this year’s worldwide financial crisis.  

Much attention has been focused on CNBC since Stewart started playing clips showing that channel’s less-than-stellar track record of market calls and its fluffy, fawning interviews with many of the players in the middle of the meltdown.

The national media’s attention has been centered on whether CNBC or its principals knew anything – and withheld it – that could have helped investors before the market tanked. Another key question: Why didn’t CNBC anchors and reporters work harder to pin down the executives of companies that were leading the American economy off the cliff?

These queries are important. But they miss a bigger question: Why do so many people revere CNBC’s market prognostications when they have such a lousy track record of predicting the future?  CNBC is long on hype and the misleading disinformation that we regard as “investment pornography,” which hurts investors more than it helps them. I also don’t understand why this channel is so highly regarded when it provides almost no basic information for investors looking for long-term guidance.

Investors love to think they’ve found gurus, and CNBC takes advantage of that weakness with promotions like “In Cramer We Trust.” The implication is that Jim Cramer knows where the market is going, knows which stocks to buy and sell and, in the words of another CNBC promotion, “he has our back.”  The truth isn’t even close.

Cramer is paid to make calls every day, and he has to do it. But investors don’t have to believe them or act on them. Last July 31, Cramer told viewers the stock market had hit bottom. That “bottom” was gone in a flash, and the market continued to slide farther and faster than anybody would have believed likely. Did that stop people from watching? Hardly. Many thought he was right, and that only his timing was off a bit.

In fact, Cramer’s timing proved to be so far off the mark that his call soon became meaningless. Recently, under pressure, Cramer admitted to Stewart that he was sorry for his poor choices and said he could do better.

During the famous Cramer-Stewart “debate,” Cramer admits his show may not have much long-lasting value. “But there’s a market for it,” he says. Stewart quickly responds by saying “There’s a market for cocaine and hookers.”  This exchange deserves great attention because it exposes the real problem with CNBC and Cramer: Neither has much staying power or redeeming value.

(The confrontation is available online at YouTube.com. Find it by doing a search for “Stewart vs. Cramer.” To view Paul Merriman’s commentary on this, follow this link:

http://www.fundadvice.com/sound-investing-tv/episodes/episode-38-cramer-vs.-stewart,-the-aftermath.html)

CNBC is not in the business of helping investors. No, its business is selling advertising.  To do that, the network must have an audience that is hooked. The network does this by creating 17 hours of  live television every day. To get younger people to watch, it makes the entire production sensational – with graphics, personalities and advice.  Although Cramer’s ratings have fallen since his on-the-air clash with Stewart, CNBC still has a strong following of young viewers, many in their 20s.

Most of the media missed the real lessons that should have been learned from the cable guys’ debate.

First, CNBC commentators – including Cramer – don’t know the future of individual companies or the future of the market any more than anybody else. Their timing calls are educated guesses at best – and stabs in the dark at worst.

Next, CNBC does its viewers a disservice by getting them too excited in the good times and too alarmed in the tough times. This leads investors to making emotion-based decisions with their money, most of which eventually turn out to be bad long-term moves. Many of those decisions helped $220 billion flow out of stock funds last year. Investors will almost certainly be better off if they ignore CNBC’s siren call.

In spite of my criticisms, CNBC does have some worthwhile programs. I recently watched one on the subprime mortgage market that was cogent, sophisticated and helped viewers better understand the crisis we face today.  

With more of that sort of programming and less of Cramer’s testosterone-inflamed bluffing, CNBC could become a useful resource worthy of its audience. For now, it’s mostly a channel that investors should avoid.

Tom Cock is an educator for Merriman.