Alternative title: Overlaying Ideology On Every Market Event/Crisis
One of the things I love most about the market is how it acts as a Rorschach test for participants and other various hanger on-ers.
For any market event, there are myriad explanations, rationals, and Monday morning quarterbacking. Experience shows us that most of these commentators are not honest brokers of information, analysis or opinion. Instead, many are people with a previous agenda, ideology or bias. They strain to insert their issue onto whatever is going on. They push their way onto the dialogue regardless of subject matter.
They are the boorish party guest who wants to talk about himself, regardless of the rest of the cocktail party conversation.
I’ve noticed more and more of this. Consider the people who have jumped all over certain issues — regardless of relevancy — to push their agendas and pet projects. Its not necessarily because it helps their investments; often times, its merely a talking point that helps make their argument.
We all engage in this. Selective perception and cognitive dissonance is part of how we are wired. My pet issue is when these folks veer into irrationality and logical inconsistency to make weak arguments. Indeed, we’ve watched tortured explanations rife with logical inconsistencies and internal reasoning flaws. These are typically vain attempts to force their way onto some event, relevancy be damned.
Anyway, here are a few examples of what has become a modern economic sport:
"¢ Credit Crisis: Hated by: Hank Paulson, Short Term Borrowers, EMH adherents, Loved by: John Paulson, Book Authors, Hyman Minsky Fans
"¢ Financial Regulatory Reform: Hated by: Banks, Investment Houses, Free Marketers, Conservatives, Larry Summers Loved by: Smaller regional banks, Elizabeth Warren, Investors, Barney Frank
"¢ Market Crash (circa January to March 2009): Hated by: Stock Bulls, Fed, Bank execs, White House Loved by: Bears, WSJ OpEd, Obama Haters, IBD OpEd, Larry Kudlow
"¢ Market Recovery (circa March 2009 to present): Hated by: Bears, WSJ OpEd, Obama Haters, IBD OpEd Loved by: Stock Bulls, Fed, Bank execs, White House, Larry Kudlow
"¢ Real Estate Collapse: Hated by: Home Owners, Mortgage Lenders, David Lereah Loved by: Fannie Mae critics, Short Sellers, Calculated Risk
"¢ Inflation: Hated by: Stock Bulls, Fed, Savers Loved by: Gold bugs, Bond Bears, Dollar Bears
"¢ The Federal Reserve’s Balance Sheet: Hated by: Gold Bugs, Dollar Bears, Fed Haters, Survivalists, David Kotok Loved by: Stock Bulls
"¢ Bail Outs: Hated by: Elected Democrats and Republicans Loved by: Lobbyists, Bailed Out Wall-Streeters, C, BAC, AIG
"¢ US Deficit: Hated by: Newly minted deficit hawks (mostly GOP), Bond Bears, US ex-Pats Loved by: Government wonks, lobbyists, Tea Party
Its a fascinating study in contrasts. Some of the loved by/hated by are very counter-intuitive, because of the way a target of hatred gives an ideologue something to live for.
The bottom line is that everyone talks their book. The savvy learn to parse through the fog of nonsense, to get to whatever truth lay underneath . . .
I was not sure what I was supposed to love or hate until I read this. Thanks for the help.
Let me be clear: I have a pre-wired agenda and I am blogging with intent. Maybe I’ve got the wrong room. I thought forcing your way into the dialogue with far-reaching impact was blogging’s biggest allure.
Forcing a pre-wired agenda onto the debate regardless of data and facts? Yes, you DO have the wrong room.
Correcting bad analysis, poor reportage, and faulty logic is at least this blogger’s intent. Regardless of politics or philosophy, there must be respect for facts, truth and a legitimate process.
Adding more spin, bad dope and myth-making is not a net positive. The birthers, 9/11 conspiracists, and all manner of Science deniers are assclowns. They force their way onto issues, regardless of relevancy, and pollute legitimate debates. They are to be thoroughly critiqued and debunked, their weak ass arguments disemboweled — regardless of format.
Calculated Risk loves the Real Estate collapse? OUCH!!
I’d say the financial crisis also helped elevate the author of Bailout Nation as much as it helped CR. No?
~~~
BR: Absolutely~!
Hey… hands off CR!
CR (along with a handful of others) were proven right by the collapse.
I was blowing Bill a kiss . . .
The most important lesson I learned studying history: What is true is not as important as what people want to BELIEVE is true. Because they will ACT on their belief, regardless of its relationship to the truth.
Generally, the greater the divergence between the truth and their beliefs, the greater the ultimate disaster….
just finished this chapter following a tv segment .. it is so not going to print .. but what the hey:
World ‘isms .. communism marxism socialism cronyism capitalism .. its fascism when you come to believe “control of the government is the best path to prosperity” via our current situation of Washington & Wall Street powers that be (or want to be). Capitalsim is pushing you into cannibalism .. The weak eaten by the fittest.
It is a delicate balance we seek of our ‘isms. Greed & Strength vs. Gluttony & Laziness. The words I like to think of “provide (give) us this day our daily bread … for peace on earth as in heaven”
What is a single life for – “FUN” I say. Funny tho somebody has to work. And some works are not fun .. not fun at all. Hense – no Utopianism for you.
The bears should be loving the rally. Talk about the chance to sell your pick of overpriced assets — stocks, junk, muni, & corporate bonds, real estate — to an army of eager bagholders!
Barney Frank must also be included as loving financial reform in the pretend, “make-it-look-like-he-supports-it-while-really-undermining-reform-and-manipulating-the-situation-for-political-gain” sense. About the one thing he has done right was to tell the banks to write off their second lien loans, but only after their refusal to do so (aided by his earlier campaign against FASB mark-to-market accounting) got in the way of mortgage mods he wants the government to help subsidize.
Gee, Kudlow loved the crash and the recovery. I think he just loves talking, period.
Good call Porsche87!
There’s always a similar dynamic at play with whatever other random market people want to assert is correlated/causative with stocks. For example: equity bulls can love both high oil prices (sign of economic recovery!) and low oil prices (huge windfall “tax cut” for the economy!) … and they can love both a falling US dollar (surging risk appetite and carry trades being put on!) and a rising dollar (sign of economic recovery!). It’s pretty trivial to conduct the same exercise with the bears.
the US IT business will continue to be dismantled by multinationals as they ramp up staff in lower cost countries. these are by and large high paying jobs and will leave big gaps in income generation for Americans. and the band played on…
Business software maker CA to cut 1,000 jobs
http://news.yahoo.com/s/ap/20100406/ap_on_hi_te/us_tec_ca_restructuring
Loan Modifications: Hated by: Fed, Banks, Rick Santelli, Barry Ritholtz Loved by: Underwater home owners, Consumer protection bar, Elizabeth Warren, Obama
Transor Z:
I suspect Santelli and BR would both be fine with loan modifications if the banks which made the bad loans were made to take the losses, instead of foisting them onto taxpayers and then insulting their intelligence by trying to pass a stealth bank recapitalization off as some kind of foreclosure prevention or alms-for-the-upside-down.
In fact, if the new Treasury plan (which would pay off banks for writing down their second liens) came to pass, you might even be able to move the banks into the “Loved By” column.
~~~
BR: Exactly !
Read Full Article »