Comments on: How Overrated is Sentiment in Economics? http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 19:05:02 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: StickWithANose » Hedgistan & Charter Schools http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-2/#comment-239803 StickWithANose » Hedgistan & Charter Schools Sun, 06 Dec 2009 19:43:27 +0000 http://www.ritholtz.com/blog/?p=44295#comment-239803 [...] hedgies live and work is a chaotic social institution built on short-term incentives that “represents the collective wisdom of 10 million panicked monkeys.” Introducing short term, numerically-driven metrics into public schooling will only lead to [...] [...] hedgies live and work is a chaotic social institution built on short-term incentives that “represents the collective wisdom of 10 million panicked monkeys.” Introducing short term, numerically-driven metrics into public schooling will only lead to [...]

]]> By: econoblog.info » Secondary Sources: Deficit, Sentiment, Fed http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-2/#comment-236679 econoblog.info » Secondary Sources: Deficit, Sentiment, Fed Tue, 24 Nov 2009 00:05:25 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236679 [...] a recession, but economic theorists have long been fascinated by such a possibility.” On his Big Picture blog, Barry Ritholtz thinks sentiment may be overrated. “One of my complaints about economics is [...] [...] a recession, but economic theorists have long been fascinated by such a possibility.” On his Big Picture blog, Barry Ritholtz thinks sentiment may be overrated. “One of my complaints about economics is [...]

]]> By: RodgerMitchell http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-2/#comment-236632 RodgerMitchell Mon, 23 Nov 2009 21:48:04 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236632 <i>“False Belief System: . . . That millions of slightly clever, pants wearing primates can combine their collective ignorance. . . into something resembling intelligence was one of the false beliefs of the era. Unfortunately, this is a condition the monkeys are prone towards (Witch burning, bloodletting, organized religion, etc.). Note however that this . . . is actually the result of what happens when a faulty belief system dominates a society.”</i> You forgot to mention the faulty belief that the federal government is living beyond its means. You can live beyond your means. So can I. So can cities, states and corporations. But the federal government cannot. It has unlimited means, as it has demonstrated during the 1,400% increase in gross debt in only 30 years: no bounced federal checks and no inflation. The faulty fear of federal debt dominates our society, causing great harm as all faulty beliefs do. <i>“Doom Warnings Began Making Sense: Many of the doomsayers have been warning of the coming apocalypse for years. . . . Maybe it was because the population is not nearly so stupid as the politicians believe.” <i>Or maybe it was because even a stopped clock is right twice a day.</i> Rodger Malcolm Mitchell http://rodgermmitchell.wordpress.com “False Belief System: . . . That millions of slightly clever, pants wearing primates can combine their collective ignorance. . . into something resembling intelligence was one of the false beliefs of the era. Unfortunately, this is a condition the monkeys are prone towards (Witch burning, bloodletting, organized religion, etc.). Note however that this . . . is actually the result of what happens when a faulty belief system dominates a society.”

You forgot to mention the faulty belief that the federal government is living beyond its means. You can live beyond your means. So can I. So can cities, states and corporations. But the federal government cannot. It has unlimited means, as it has demonstrated during the 1,400% increase in gross debt in only 30 years: no bounced federal checks and no inflation. The faulty fear of federal debt dominates our society, causing great harm as all faulty beliefs do.

“Doom Warnings Began Making Sense: Many of the doomsayers have been warning of the coming apocalypse for years. . . . Maybe it was because the population is not nearly so stupid as the politicians believe.” Or maybe it was because even a stopped clock is right twice a day.

Rodger Malcolm Mitchell
http://rodgermmitchell.wordpress.com

]]> By: RodgerMitchell http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-2/#comment-236631 RodgerMitchell Mon, 23 Nov 2009 21:47:31 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236631 <i>“False Belief System: . . . That millions of slightly clever, pants wearing primates can combine their collective ignorance. . . into something resembling intelligence was one of the false beliefs of the era. Unfortunately, this is a condition the monkeys are prone towards (Witch burning, bloodletting, organized religion, etc.). Note however that this . . . is actually the result of what happens when a faulty belief system dominates a society.”</i> You forgot to mention the faulty belief that the federal government is living beyond its means. You can live beyond your means. So can I. So can cities, states and corporations. But the federal government cannot. It has unlimited means, as it has demonstrated during the 1,400% increase in gross debt in only 30 years: no bounced federal checks and no inflation. The faulty fear of federal debt dominates our society, causing great harm as all faulty beliefs do. <i>“Doom Warnings Began Making Sense: Many of the doomsayers have been warning of the coming apocalypse for years. . . . Maybe it was because the population is not nearly so stupid as the politicians believe.” Or maybe it was because even a stopped clock is right twice a day.</i> Rodger Malcolm Mitchell http://rodgermmitchell.wordpress.com “False Belief System: . . . That millions of slightly clever, pants wearing primates can combine their collective ignorance. . . into something resembling intelligence was one of the false beliefs of the era. Unfortunately, this is a condition the monkeys are prone towards (Witch burning, bloodletting, organized religion, etc.). Note however that this . . . is actually the result of what happens when a faulty belief system dominates a society.”

You forgot to mention the faulty belief that the federal government is living beyond its means. You can live beyond your means. So can I. So can cities, states and corporations. But the federal government cannot. It has unlimited means, as it has demonstrated during the 1,400% increase in gross debt in only 30 years: no bounced federal checks and no inflation. The faulty fear of federal debt dominates our society, causing great harm as all faulty beliefs do.

“Doom Warnings Began Making Sense: Many of the doomsayers have been warning of the coming apocalypse for years. . . . Maybe it was because the population is not nearly so stupid as the politicians believe.” Or maybe it was because even a stopped clock is right twice a day.

Rodger Malcolm Mitchell
http://rodgermmitchell.wordpress.com

]]> By: Monday links: Treasury teaser rates Abnormal Returns http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-1/#comment-236547 Monday links: Treasury teaser rates Abnormal Returns Mon, 23 Nov 2009 17:17:44 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236547 [...] Sentiment is overrated in economics.  (Big Picture) [...] [...] Sentiment is overrated in economics.  (Big Picture) [...]

]]> By: Secondary Sources: Deficit, Sentiment, Fed - Real Time Economics - WSJ http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-1/#comment-236538 Secondary Sources: Deficit, Sentiment, Fed - Real Time Economics - WSJ Mon, 23 Nov 2009 16:54:54 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236538 [...] a recession, but economic theorists have long been fascinated by such a possibility.” On his Big Picture blog, Barry Ritholtz thinks sentiment may be overrated. “One of my complaints about economics is [...] [...] a recession, but economic theorists have long been fascinated by such a possibility.” On his Big Picture blog, Barry Ritholtz thinks sentiment may be overrated. “One of my complaints about economics is [...]

]]> By: hue http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-1/#comment-236496 hue Mon, 23 Nov 2009 14:40:50 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236496 danm, i thought Canadians were an optimistic bunch, too much free h-care clouding your judgment? other people compare the current market to 1938, let's jump straight to near the end of the Depression, we operate on Internet time, or 1974, which wasn't preceded by a huge crash, well the market did drop 40% over 2 years, but retested the lows, unlike this rally. or better yet 1987, when the market snapped back and up up and away for 30 years. danm, i thought Canadians were an optimistic bunch, too much free h-care clouding your judgment?

other people compare the current market to 1938, let’s jump straight to near the end of the Depression, we operate on Internet time, or 1974, which wasn’t preceded by a huge crash, well the market did drop 40% over 2 years, but retested the lows, unlike this rally. or better yet 1987, when the market snapped back and up up and away for 30 years.

]]> By: Mike’s Blog Roundup http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-1/#comment-236482 Mike’s Blog Roundup Mon, 23 Nov 2009 13:49:08 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236482 [...] The Big Picture: How overrated is sentiment in economics? [...] [...] The Big Picture: How overrated is sentiment in economics? [...]

]]> By: danm http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-1/#comment-236472 danm Mon, 23 Nov 2009 13:19:10 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236472 In 1929, everyone was in the market. Then the market tank and probably knocked off more than 50% of players. Then in 1930, the market went back up. Probably spurred by those who were on the sidelines during the preceding years and finally felt it was their time to go in. Then the market tanked again­. This played out time and time agains until 1935. In 1935, it was finally time to go back in for real but there were barely any players left. IMO, the same thing is going to happen. You got the first batch of investors who lost their money and for cash flow purposes (60+ retired) can not tolerate the volatility anymore. I wouldn't be surprised if this rally was triggered by a huge number of people who had been on the sidelines for the last couple of years finally jumped in + all those who think government involvement is going to fix everything . The way I see it, we are just now starting to see the effects of moral hazard (strategic defaults). That can't be good. In 1929, everyone was in the market. Then the market tank and probably knocked off more than 50% of players.

Then in 1930, the market went back up. Probably spurred by those who were on the sidelines during the preceding years and finally felt it was their time to go in.

Then the market tanked again­. This played out time and time agains until 1935. In 1935, it was finally time to go back in for real but there were barely any players left.

IMO, the same thing is going to happen. You got the first batch of investors who lost their money and for cash flow purposes (60+ retired) can not tolerate the volatility anymore.

I wouldn’t be surprised if this rally was triggered by a huge number of people who had been on the sidelines for the last couple of years finally jumped in + all those who think government involvement is going to fix everything .

The way I see it, we are just now starting to see the effects of moral hazard (strategic defaults). That can’t be good.

]]> By: Eric Davis http://www.ritholtz.com/blog/2009/11/how-overrated-is-sentiment/comment-page-1/#comment-236467 Eric Davis Mon, 23 Nov 2009 13:07:28 +0000 http://www.ritholtz.com/blog/?p=44295#comment-236467 This stuff is the same reason CNBC, feels honor bound to "Cheer lead". I'm a huge fan of behavioral economics, but if you listen to the interpretation of some of the more Conservative economists, their interpretation is more like "When you wish Upon a star" economics. This stuff is the same reason CNBC, feels honor bound to “Cheer lead”. I’m a huge fan of behavioral economics, but if you listen to the interpretation of some of the more Conservative economists, their interpretation is more like “When you wish Upon a star” economics.

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