Zero Hedge has largely avoided any serious scrutiny for the past several years, after some critical stories in New York magazine and on Felix Salmon’s blog. I wonder if that’s about to change.
While waiting for serious reporters to subject ZH to the same kind of critical inquiry that ZH routinely aims at its myriad enemies, I have a few questions that might be worth exploring:
1. Do ZH writers have positions in the market? Any market? 2. Do they disclose positions when they write stories related to their positions, or post tweets related to their positions? 3. Is the SEC at all curious about a hugely influential, and possibly market moving/market influencing site in which someone banned from the securities industry is deeply involved? (Daniel Ivandjiiski, banned from the industry for insider trading denies being a “founder” of ZH, but this sounds weasel-like, depending on the definition of “founder.” He is the only publicly identified writer for the site.) 4. Is the fear of SEC scrutiny why ZH is registered and hosted in Switzerland? If that’s not the reason-what is?
I have many more questions, but that will do for now.
[...] Streetwise Professor has a few questions for Zero [...]
Pingback by FT Alphaville » Further reading — February 28, 2012 @ 2:21 am
Woah! Here we go. Looks like ZH is starting to concern the mainstream press. Why now if after all they’ve been around for several years? Looks like they may be on to “something” right? Like maybe theyre starting to concern parts of the mainstream press who have a vested interest in ensuring the status quo perhaps? …Its about to get ugly.
Comment by MattC — February 28, 2012 @ 4:23 am
Of course they have positions in the market and of course they will use their platform to influence price movement. Isn’t that the case with virtually every “expert” on Bloomberg/CNBC (not to mention El Erian who seems to be a full time journalist these days).
Comment by hedonistbot — February 28, 2012 @ 5:27 am
Why on earth should I care? Hope they have positions and make big fat money!
Comment by minusonegee — February 28, 2012 @ 7:32 am
Zero Hedge Conflict policy: http://www.zerohedge.com/node/13972
You should assume that at all times we are so totally just talking our book it would shock and awe you like the unexpected, early-morning arrival of a cluster of BGM-109C Tomahawks (were you a believer in the importance of “optics” that is).
If we make a off-hand remark about New Zealand sheep herders it’s because we are long New Zealand West Island Cold Kut (NZ-WICK) Wool futures and Kiwi brand Condoms (“For it’s pleasure”). If we are joking around about Cliff Asness, it’s because we have developed a synthetic short of ARQ. If we jest about Joe Sixpack, it’s because we are trying to hype our cheap-American-beer holdings so we can exit quickly. Basically, we are telling you about a position we believe in strongly enough to invest in.
…
The reality is, critical readers should read analytic posts and the rest of Zero Hedge with the blanket assumption that the author is totally “conflicted.” (Phrased more logically, that the author stands to benefit from being right- imagine that). … For those of you less prone to understand the above: we’re a collective of writers. It should be assumed, in concert with our statement that blankets that we’re not an advisory institution of any light, in any capacity, but rather a news organization, that we own any and all of the securities, bonds, liabilities, or instruments that we’re talking about. In so assuming, you’re putting yourself in a defense position; we accept no responsibility for anything traded-on because of this website. We’re here to make you think, not to make you trade; we wish you the best in the former.
Comment by dwb — February 28, 2012 @ 8:17 am
Go on ZH and announce you think the price of gold or silver will fall and then be prepared for all the abuse. I don’t bother taking what these guys have to say at face value anymore since they strike me as a bunch of bitter posters sacked by one financial company or another. These guys need to seriously get a life. It must be tough being so negative all day.
Comment by mcarthur — February 28, 2012 @ 8:19 am
@ dwb
Well put Sir!!!
Comment by MattC — February 28, 2012 @ 9:51 am
What a strange rant from a Chicago U. PHD. Even stranger that FTA chooses to post it.
I have no affiliation with Zero Hedge at all. I’m an outside contributor who has been permitted to post articles on their site. From that experience I can tell you that if a writer wanted to get something in front of the “deciders” on Wall Street, or better yet, the “deciders” in D.C., then this Emag is the place to go.
Just so you know Professor, the SEC has people reading every word at Zero Hedge. That’s also true for the FBI, CIA, Federal Reserve, Home Land Security and the Treasury Department. No one (including me) who writes critical things about government policy, world events, markets or big companies avoids this scrutiny. Adding to the list of “watchers” are the dozens of countries who are doing the same. All of those nice folks don’t need you to make suggestions about how to restrict the flow of information. They’re way ahead of you.
Many big companies and government agencies already restrict access to my site. The same is true for ZH (and others). After all, no one wants to hear a negative view. Right, Professor? It’s best for guys like you to choose what is available, right?
Find something important to write about.
Bruce Krasting
Comment by Bruce Krasting — February 28, 2012 @ 10:37 am
Streetwise prof does raise some interesting questions about ZH. More generally, though, the biggest conflict of interest in terms of writers and bloggers concerns the housing market. If a writer owns a house, they will most likely spin the story in their favour. If they don’t, they will most likely talk it down. The collective impact can be huge: most newspaper writers at least are probably owners. Rules or guidelines concerning disclosure of this particular kind of conflict would probably produce the greatest bang for buck.
Comment by Nicholas Shaxson — February 28, 2012 @ 11:38 am
With any service such as ZH, the Regan motto of trust but verify is the least or lowest level of protection one must take. That said, ZH will gain legitimacy with some of the public and the media to the extent:
1. it confirms or expands the biases of the media, 2. It is occasionally right, or at least interesting.
Indeed if ZH wants to succeed it must follow the two rules above if it is to succeed as a propaganda tool. Assuming, and this is a real stretch, that this stuff is presented in good faith, the best we should view this as is an opinion to be considered: Marxists often can give valuable insight, but their biases and prescriptions are ridiculous, as in “Have a cold? Cut off your head.” Personally, I view it as a propaganda outfit of an individual, like many blogs and needs to be viewed with more than the usual suspicion.
Comment by sotos — February 28, 2012 @ 12:31 pm
As a long time member of a Chicago exchange and occasional blogger I ran across ZH when they were just a few weeks old, I’ve always assumed that they are very conflicted members of the trading community talking their positions and that some of the writers and contributors are downright ignorant. That said, they’ve done some interesting work.
Comment by Matches Malone — February 28, 2012 @ 1:26 pm
Some influx of unfamiliar commenters here. I guess SWP might be onto something.
Comment by LL — February 28, 2012 @ 3:29 pm
Most of the reading public is not equipped to know when the ZH folks are talking their book. They cannot differentiate between self-serving tripe and legit insight into what’s going on, which, giving credit where credit’s due, comes from being in the markets. It’s another instance of being able to distinguish BS from real insight … unfortunately, even the most market-savvy folks cannot always get this right.
Comment by markets.aurelius — February 28, 2012 @ 5:56 pm
I’m a scientist by trade who stumbled across ZH in their infancy while trying to understand what was causing our economy to melt down. It has been a wild ride with a steep learning curve. Being data-driven, I appreciate that ZH frequently links back to primary source material. I have spent a lot of time researching finance in order to better understand the material presented. Sure, they toss their readers red meat, sensationalized stories with some regularity, but I love tucking into the more wonky analyses that requires having many tabs open to understand/verify the underlying data. Krasting is one of the more informative contributors. ZH has more substance than the tightly held, mainstream media outlets who are also talking their book. Any one who takes anything at face value these days deserves whatever they get from that choice…
Comment by Dantzler — February 28, 2012 @ 8:39 pm
Aren’t inside traders the only ones to make money anyway?
Comment by So? — February 28, 2012 @ 10:56 pm
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