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 . . .

Category: Psychology, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

37 Responses to “Everyone Talks Their Book . . .”

  1. globaleyes says:

    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.

  2. 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.

  3. odds says:

    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~!

  4. wally says:

    Hey… hands off CR!

  5. CR (along with a handful of others) were proven right by the collapse.

    I was blowing Bill a kiss . . .

  6. CardinalRam says:

    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….

  7. Greg0658 says:

    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.

  8. Graphite says:

    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.

  9. Porsche87 says:

    Gee, Kudlow loved the crash and the recovery. I think he just loves talking, period.

  10. Graphite says:

    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.

  11. Rikky says:

    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

  12. Transor Z says:

    Loan Modifications:
    Hated by: Fed, Banks, Rick Santelli, Barry Ritholtz
    Loved by: Underwater home owners, Consumer protection bar, Elizabeth Warren, Obama

  13. Graphite says:

    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 !

  14. “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.”

    Well said, CardinalRam. Further, although the data and trends will often change gradually, human perceptions behave more like step functions. We tend to hold fast to our beliefs, even in the face of contrary data, until at some point “critical mass” is achieved and we change our views, oftentimes all at once. That’s why bubbles can achieve such great heights and then subsequently crash with equal ferocity.

  15. Thor says:

    You forgot the State fiscal crisis and public employees pension problem- Hated by government officials loved by Mish.

  16. Casual Onlooker says:

    A problem with all the choice we have these days with “media sources”, and I use that term loosely, is that people can easily filter their information so as to only view sources that bolster what they already believe in. We launch into tribe building, and we embark on dehumanizing those that aren’t in our tribe.

    One of the most insidious and pervasive ways of dehumanizing others is the deliberate manipulation of language. It’s not the government, it’s ‘gubernment’, not people, but ‘sheeple’, we call it ‘obamacare’, and so forth. Why take the time to listen to the other side and try to understand their viewpoints when it is much more expedient to simply tear down the other side, to make them something other than simply people with viewpoints that differ from ours?

  17. FormerlyknownasJS says:

    Barry,

    Thanks for the entertaining post about an important point to remember. I did catch one error though. You have the Fed hating inflation, and this is simply mistaken. The Fed hates deflation. They do hate high levels of inflation, but low levels of inflation are a policy goal. Most Fed members adhere to either an explicit or de facto positive inflation target. So in a sense they love inflation, just low levels of it, and hate deflation of any kind, even price stability (inflation=0%).

  18. Thor says:

    CasualO -

    I would agree, I think the source of self limiting of media sources started with cable television even before the internet, a person could really watch whatever networks best suited their own personal beliefs and biases.

    Spot on with dehumanizing language too! I’ve been guilty of using the term Sheeple from time to time as well, you’re right though, it completely dehumanizes other people.

  19. krice2001 says:

    Cardinal Ram and Casual Observer (and Thor) make excellent points. And in particular I’ve thought about how we have such easy opportunities to select the exact media that bolsters our comfortable biases – politcally, economically or whatever. We probably all do that some of that – but investing that way is at your own peril.

    I’ve come to appreciate sources like Barry’s for expressing opinions (which is partly why I’m here) but basing actions and recommendations on “agnostic”, data driven models. I think most of us at this point can easily spot “uncomfortable” biases cropping up in various financial and economic media. And when we see that we immediately have to discount what’s said. Fortunately, I never feel that way here (other than the responses which is one of my favorite parts of this blog…).

  20. [...] most of these commentators are not honest brokers of information, analysis or opinion.”  (Big Picture earlier Abnormal [...]

  21. Mannwich says:

    @Formerly: Correction: The Fed hates inflation that is actually counted. They like inflation of things that aren’t counted and are especially enamored with asset inflation of all kinds because that keeps their masters happy.

  22. ToNYC says:

    “The bottom line is that everyone talks their book.”
    You miss the simple point that you continually associate with people who can’t get over themselves. This self-absorption with self-service is the issue. No, it’s not hard-wired, although it seems like that in Savannah’s. If you try rather to help people and forget about who gets the credit, you will free what is left of your oh-so-busy, multitasking, acquiring muchness and see what is really there that exists without your self-streaming consciousness.

  23. w/this one: • Inflation:
    Hated by: Stock Bulls, Fed, Savers

    BR,

    do you mean “FedGov”, or “FedRes” ? and, really, if either, How do you construct that ‘they’ “hate inflation”?

  24. dead hobo says:

    Mannwich Says:
    April 6th, 2010 at 12:43 pm

    The Fed hates inflation that is actually counted. They like inflation of things that aren’t counted and are especially enamored with asset inflation of all kinds because that keeps their masters happy.

    reply:
    ———-
    Actually, the only inflation they hate is the kind that causes wages to rise. It’s OK to squeeze the working folks. Heaven forfend if wages rise to meet rising costs. Rising costs without rising wages are OK. $150 oil is just peachy. Ditto with 2nd round costs. That’s why they invented core cpi. You can keep inflation buried longer that way. Start handing out raises and maybe raising prices to match higher costs and watch inflation all of a sudden get noticed.

  25. Mannwich says:

    @dead hobo: Appreciate the clarification. You are 100% right.

    I would add that rising costs without rising wages is not only “OK” with the Fed, but it is their preference. That allows them to deny there is inflation anywhere when everyone knows in reality this simply isn’t true.

  26. MorticiaA says:

    Critically thinking for ones self:

    Hated by: public education system, Congress, MSM
    Love by: intelligent bloggers, political moderates, your parents

  27. callistenes says:

    Screw the truth, follow the money.

  28. Agreed regarding the Fed and its love of inflation (or, rather, just enough inflation to make the people believe they are getting richer when, in fact, their wealth is being slowly, insidiously eroded and transferred to the folks in power).

  29. Morticia — that is delightful !

  30. Shadowfax says:

    Medicare:
    Hated by: Deficit hawks, China, The Young Taxpayer
    Loved by: Seniors and Republicans (who, after 60 years of fighting it now defend it)

    Ben Franklin said: “For having lived long, I have experienced many instances of being obliged by better information, or fuller consideration, to change opinions even on important subjects, which I once thought right, but found to be otherwise. It is therefore that the older I grow, the more apt I am to doubt my own judgment, and to pay more respect to the judgment of others. Most men indeed as well as most sects in Religion, think themselves in possession of all truth, and that wherever others differ from them it is so far error. Steele a Protestant in a Dedication tells the Pope, that the only difference between our Churches in their opinions of the certainty of their doctrines is, the Church of Rome is infallible and the Church of England is never in the wrong. But though many private persons think almost as highly of their own infallibility as of that of their sect, few express it so naturally as a certain french lady, who in a dispute with her sister, said “I don’t know how it happens, Sister but I meet with no body but myself, that’s always in the right.”

    http://www.usconstitution.net/franklin.html

  31. [...] Second, DJMT calls “shenanigans” on the NYT happy talk. While I don’t completely agree, I will concede that Paul Vigna  raises a valid point as to both the NYT and the WSJ. As we noted yesterday, everybody talks their book. [...]

  32. “and all manner of Science deniers are assclowns.”–BR, above

    1: Climategate: The Mother of All Deceptions
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.” — H.L. Mencken (1918)

    “Our job is to give people not what they want, but what we decide they ought to have.”
    – Richard Salent, Former President CBS News.

    The recent exposures of fraud coming from the Hadley Climate Research Unit, then followed by similar exposures at New Zealand’s NWIA, Australia’s climate center, and NOAA have only confirmed the doubts arising from the obviously NON-scientific methods employed by the Anthropogenic Global Warming supporters, hereinafter called the “Global Warming Cult”. I call them a cult because of the abandonment of scientific method by many of the acolytes, together with a recent British Court decision that declared belief in Global Warming was accorded the status of a religion.

    Human Caused Global Warming is not being researched; it is being promoted. Al Gore and his fellow investors have spent over a hundred million dollars in creating a crisis of human-caused global warming out of (quite literally) thin air. They are not doing this out of the goodness of their hearts. They expect to reap billions in profits from the trading of Carbon Credits, a “license to pollute” available for a price and subject to brokerage fees. One of the people Al Gore relied on to create this scheme was Ken Lay, late of ENRON, aka the Crooked “E”. Al Gore plans to use Carbon Dioxide to do to the world what Ken Lay did to California using electricity; loot the people! ..”
    http://whatreallyhappened.com/WRHARTICLES/climategate.php
    http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Hadley+Climate+Research+Unit+Climategate+
    http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=UN+IPCC+Climategate

    BR,

    you’re meaning, with ‘Science deniers’, the craven liars at Hadley CRU/ U.N. IPCC, yes?

  33. Casual Onlooker says:

    @Mark E Hoffer ..rant about climate…

    Give me a break. There is a difference between skeptics and deniers. From http://davidbrin.blogspot.com/2010/02/distinguishing-climate-deniers-from.html Read it.

    “Skeptics go on to admit that it is both rare and significant when nearly 100% of the scientists in any field share a consensus-model, before splitting to fight over sub-models. Hence, if an outsider thinks that there appears to be “something wrong” with the core model, the humble and justified response of that curious outsider is to ask “what mistake am I making?” — before assuming 100% of the experts are wrong.

    In contrast, Deniers glom onto an anecdotal “gotcha!” from a dogma-show or politically biased blog site. Whereupon they conclude that ALL of the atmospheric scientists must be in on some wretched conspiracy. Simultaneously. Uniformly. At the same time.”

    Facts and reason
    Hated by: Deniers
    Loved by: Skeptics

  34. Onlooker,

    you link to a site promoting “HGCC” (human generated climate change)–the new ‘goalpost’ of, the previous, AGW (anthropogenic global warming), and, then, want to link me to: “Deniers glom onto an anecdotal “gotcha!” from a dogma-show or politically biased blog site…” (?)

    really, try answering the posit of: “..fraud coming from the Hadley Climate Research Unit, then followed by similar exposures at New Zealand’s NWIA, Australia’s climate center, and NOAA have only confirmed the doubts arising from the obviously NON-scientific methods employed by the Anthropogenic Global Warming supporters…the abandonment of scientific method by many of the acolytes..”

    or, if that’s too difficult, what is it that the “HGCC”-crowd is going to do about ‘GHG’-releases from Volcanoes??

    as a simple starting point– http://pubs.usgs.gov/of/1997/of97-262/of97-262.html

  35. Way to stay on topic guys!

  36. [...] a 75% generational rally risk losing clients and assets. The danger for both bulls and bears is bringing their bias to the table, and missing the risk or the opportunity of the [...]