I think ZH is a great site, and I read it daily, BUT if you don't take it with a truckload of salt then it will be hazardous to your wealth. Seriously, if you had been in the ZH bear trade since 2009, then you missed out on the greatest stock market rally in a generation. I know, because I missed the first half of said rally as a ZH reader until I realized that the constant drumbeat of negative news from that site was distorting my judgement.
Here is what ZH is good for: they have stuff before anyone else, because they'll print almost anything. For instance, after San Bernardino those guys had details way before other outlets, because they're willing to go to press with just "some guy overheard this on the police scanner and tweeted it".
So when you read ZH you see stuff first, but you place a big mental asterisk by it until their scoop trickles up the media food chain and starts to get confirmed as real reporters do actual work on it.
I like seeing stuff first, before everyone else gets it, hence my continued regular reading of ZH (again, I keep a 40lb bag of Morton Salt by my desk with the ZH logo on it, though).
ZeroHedge has a lot of shady things, and if you didn't know better you'd think the world was falling apart.
That being said, their bearish view is pretty important when it gets confirmed by huge people. For instance, ZH has been beating the drums on high yield debt since summer of last year, then Icahn steps in and make similar comments and takes to task BlackRock CEO about their HY ETF being shady and the underlying market being illiquid. There hasn't been a high yield implosion, but a lot of people are betting there will be sometime in the near future. But maybe there won't be? Everything is a gamble, I've lost plenty of money being too early or too late.
You can get decent trade ideas from ZH, but like you said, 95% of their items have to be taken with a grain of salt. The odd part is that most traders, professional traders, and some hedge fund managers frequent ZH and mostly agree on some of their doom scenarios; but the central banks pump the markets with so much money it's impossible to bet against the S&P. "Don't fight the Fed" is a slogan for a reason.
John Mauldin and Worth Wray are two really strong voices for the high yield debt problem. I have learned an incredible amount from them and trust them far more than Zero Hedge on such topics. ZH is the frontline pulse but if you don't want to have to filter out 85% of the crap, Mauldin and Wray are excellent sources.
Reading ZH like Reddit will always turn out to be toxic. It isn't just the low signal-to-noise ratio. The site's core Austrian philosophy is at odds with the forefront of economic evidence.
I skim it from time to time. Very quickly. If I see something interesting, I look look at the source. If it's credible, e.g. Reuters, I cautiously read. If it isn't, I research it. Once in a while I'll come across novel, credible sources this way. This is the No. 1 way to get value from ZH.
The other time I read ZH is when I have a specific crisis on mind, e.g. Greece/Brazil/Venezuela shitting the pot. ZH throws up a good sense of how the bear market feels. Still terrible analysis. But good sentiment stock.
So, a link to conjecture from an associate professor at the PREEMINENT SCHOOL for studying Austrian School economics in the US... is evidence against Austrian school economics?
Let me put it this way: there is a lot of financial incentive for Austrian School economics to appear "wrong", because Keynesian "economics" is really all about printing money and earmarking it for buddies within a given office's constituency.
Austrian School economics can't really actually be wrong. It's primarily the study of basically common sense things that can be proven a priori, such as subjective value (if you like purple more than I do, a purple bike might be worth more to you than to me... can something like that really be proven wrong?) and ideas like allowing people to spend money as a means of expressing the value of a given good or service.
The fact that there is an active movement within our government and its "education" system to apparently disprove such things is preposterous. But given the financial incentives, it's not surprising.
I'd have thought the opinion of an academic based at the pre-eminent school for studying Austrian economics in the US would be considered an unusually informed one. Especially when he explains why even though he's largely politically aligned with them he thinks much of their theory is lacking.
Let me put it this way: the reason the academic mainstream has relatively little regard for Austrian economics and even less for permabear investment advice based around passing familiarity with Austrian economics has nothing to do with printing money for their buddies (which the more influential half of the economic establishment has been passionately arguing against for decades) and everything to do with adherents of the discipline's tendency to rely on rants about government conspiracy once the economic problem gets a bit more complicated than determining who buys the purple bicycle from whom.
The education system isn't in the slightest bit interested in disproving the sort of trivial economic stuff about preferences that most microeconomists simply absorb as foundational axioms on the first day of their undergrad course rather than writing papers about how they can be deduced from the statement "humans act", but they're rather more sceptical about extending that to "therefore, it's true a priori the gold standard is the only way to run an economy and that QE will inevitably lead to uncontrollable hyperinflation and large scale malinvestment. (Which is the sort of prediction made on a regular basis by Austrian-inspired economic commentators on finance sites like the one being discussed here). Especially if the proponent of the idea starts ranting about "financial incentives" and wrapping inverted commas around the word education at the mere suggestion that such hypotheses might be falsified.
Milton Friedman was the father of Neo-Keynesian economics, and Milton Friedman literally INVENTED monetarism. If you actually think Austrian School, which has been considered heterodoxy, if not blasphemy, to any standing US government in the past 80 years, is the influence behind quantitative easing, then I don't really know what to say at this point...
I appreciate the link, this was a good read even though I ultimately disagree with his overall assertion. This issue isn't going to be settled here, or anytime soon, it's been going on since before many of us were born, and will probably continue after we're gone.
I lost about $100k in 2009 buying into the ZH-gloom and doom mentality, unfortunately. Everything they said made sense, but it just wasn't how the world works.
In a 2009 bear's defense it was unprecedented Government intervention that lit the fuse under the markets and led us here. I remember reaching a point myself where I realized that policy was driving the markets more than any other factor and quit actively trading completely. You can be right but if the Feds take the other side of your trade you will be bragging about it to your fellow corpses in the graveyard.
Yep. At the time, I was reminded of a quote from The Iliad, which I can't find anymore. It was something to the effect of, when the gods come down to earth to meddle in the affairs of mortals, the only ones who win are the ones whose side they take.
> In a 2009 bear's defense it was unprecedented Government intervention
The novel part was the purchase of government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities. The Fed's balance-sheet expansion, interest-rate regime and their effects on the market have precedent [1].
I learned a very valuable lesson from reading Housing Bubble blogs and what not during the 2008 Financial Crisis.
I prided myself on being one of those people who saw it before it was happening, and had purchased double shorted bank ETF's. I thought I was a genius by "getting news first" and acting on it, and seeing the money I was "making". But then the Government stepped in and said they would not let the banks fail. My position evaporated into thin air.
You learned half the lesson. The other half is the over-class will force the government to do whatever is needed to keep them from going bust.
My dad claimed that the biggest mistake he made financially was when Chrysler was going bankrupt in in the early eighties. He knew that it was politically impossible for the government to let Chrysler fail. However my dad didn't follow through and sock the 100k he had into Chrysler stock.
I did the same thing. I knew in January 2009 that the slide in financial stocks was over. Should have put half into Goldman Sacks half into JP Morgan. The Fed wasn't going to let Goldman Sacks and JP Morgan fail.
Chrysler was 1979, GM was 2008 totally different political economic climate. In 1979 ordinary businesses and unions had a huge amount of political clout. And Chrysler wasn't an ordinary business.
By 2008 only Wall Street investment banks had that clout. That's because under neo-liberalism the profits from the real economy are funneled through the investment house. Letting them go under means the spigot gets turned off.
Putting all your eggs into a single risky basket is not a good thing. Sounds like your dad was wise despite wishing he had done otherwise with the benefit of hindsight.
What do you think about the rally now? I too have been following the site since it started. Around 2011 or so I realized I was missing the greatest rally, possibly ever, but I was an unemployed millennial with no money to invest.
In the past 2 years or so I'm finally on a good financial footing but I really think this monetary experiment is coming to an end and I dont think I'm thinking that only from reading doom media.
Hope I'm wrong, because another downturn would be bad for this country.
There are two principles at work here. First is Lord Acton's rule: "things that can't go on forever, don't." The second is Keynes: "the market can stay irrational a lot longer than you can stay solvent."
Everyone knows that this has to end -- not just in doom media but everywhere -- but all smart traders know that being early is the exact same thing as being wrong.
You cannot time whats coming, and unless you're running money for somebody else, you don't have to. The only thing you can do is diversify. I know that this is standard advice and it's not nearly as sexy as betting on The Big One, but having a healthily diversified portfolio is literally the only way to stay sane.
If you just have to buy catastrophe insurance, then treat it like what it is: a small hedge against a long tail eventuality. That means don't bet your lifestyle on it.
For me, the most powerful lesson from the GFC is that /everyone/, without exception, is net long The System, and when you bet against The System you bet against the combined best efforts of the most advanced civilization that this planet has ever produced. That is stupid, so don't do it.
The problem is that you can't properly diversify anymore, I went looking for things that weren't correlated. Heck during all the fed/government meddling things that should have been negatively correlated were moving together. That is when I concluded the whole thing was rigged, and it was better to go with the herd than get run over by it. In my own way I bet against the housing boom of the early/mid 2000's too. I didn't really lose any money, but what I learned is that I should have just went out and purchased the largest house I couldn't afford, because the government made it clear that they would do anything to prop up housing/banks/etc. We will never see a _REAL_ price crash in housing because as soon as the markets start to dip a few percent the 2% loans, tax breaks, and bailouts for banks holding empty real-estate they cant sell because doing so will cause the prices to drop further.
I've realized in my life trying to predict macro is pretty damn hard. Because even if something is irrational, it might be in a whole bunch of very powerful group's interests to keep on propping up the irrational for a very long time.
For example, I come from Vancouver. In Vancouver, the 2007 real estate bubble never stopped, wages stayed at their Reno, NV levels. Having Vancouver RE has had about a %30 annualized return for about 15 years. Now an average house is about 1.5-2 million dollars. The housing market is completely irrational, but knowing how it works it might be another 'boom' decade or it might all collapse on itself in the next few years.
As other posters have said: diversification is the only free lunch because market timing is nearly impossible. The other thing you can do is invest in yourself and increase your income earning potential (which, to me, means both the absolute amount of income you make and how much your enjoy your job and therefore how long you can last in it). As returns on financial capital decrease, returns on human capital (your own labor) become relatively more important and attractive. If we are truly headed for decades of ZIRP and sub-4% (or even flat) real returns then YOU are the best place to invest your money.
I get what you're saying, but it's not quite like that with ZH. Those guys may not do a bunch of legwork, but they have good instincts for which stories are likely to be worth following up on and which are just lizard man nonsense. Their instincts act as a kind of initial filter.
There are other sites you can go to if you just want to see anything and everything (and there's always Twitter), but the value of ZH (which I probably should've spelled out in the parent) is that they do an initial pass with their noise filter, and while there's still a ton of noise there's also enough signal there after they've done their thing that it's still worthwhile.
I stopped reading this site some years ago. It had, and probably still has some interesting opinins and analysis. Most content is pretty far fetched / sensationalist, but if you have your grain of salt, this is not a problem, since most media outlets do this in one form or another.
About 2 years ago the tenor of the publications shifted from libertarian to more and more reactionary (bordering on proto-fascist). When I skip the articles nowdays, I think that the authors have no problem with authoritarianism, as long as taxes are reduced and social welfare is gutted (it is obviously not stated as such, but most opinion-pieces speak for themself).
I don't know what could have caused that shift, but I think you can generate more traffic and hence more profit, Lokey view on this explains a lot.
>I think that the authors have no problem with authoritarianism
Like any conspiracy site, it's going to attract people who share a view of the world in which everything must be orchestrated, controlled - a reason for all things. Randomness has no place in the mind of a conspiracy theorist. The order provided by conspiracies comfort the conspiracy theorist: paradoxically making the world feel safer, more ordered while simultaneously believing that evil people have devoted their lives to ruining yours.
If you think about it, such a psychology is naturally authoritarian-leaning. Such a mind yearns for stability, order and control.
> Randomness has no place in the mind of a conspiracy theorist.
I agree, and I see chronic conspiracy theorizing as a pathology. One should beware the Grand Unified Conspiracy Theory of Everything (antisemitism, capitalism, imperialism, patriarchy, 'Cultural Marxism', are common belief attractors on who to blame)
But conspiracies do also exist in reality - in fact, conspiracies should be rather common, as giving your opponents perfect information makes you less competitive. As they say, one man's conspiracy is another man's business plan.
There have been many occasions when "conspiracy theories" turned out to be true (Iran-Contra, Watergate, George W. Bush's manipulation of intelligence over Iraq's WMD), and it's all too convenient for the perpetrators to dismiss accusations as such.
Particularly, present day corporate media that only airs a narrow range of opinions and has zero interest in investigative journalism, tends to call anything that question the motives of those in power a conspiracy theory. Likewise the outsize role of money in US politics means it's easy for politicians to be bought and lobbied. And difficult for the corporate media, subject to the same financial pressures themselves, to point it out.
That disconnect between media reporting and reality also leads to a kind of 'conspiracy theory' that isn't a conspiracy theory at all: when politicians or corporations do corrupt things or go against the public interest in plain sight, but nobody in widely circulated news media's willing to report on it and bring it into public conversation. If you're on the right you'd say this is what's happening with immigration. If you're on the left you'd say it's what is happening with financial corruption or the military-industrial complex.
Successful democracy depends on information flow between population, media and politicians, and corruption and pressure from special interests can undermine that. Arguably conspiracy theories are a symptom of a decline of trust in a unified democratic society and particularly government and media. Those who subscribe tend to feel marginalized in some way.
Plenty of those who point this out aren't authoritarian in the least.
No. I'm speaking about people who spend most of their time online on conspiracy sites. I should know, I used to be one of them. I was 17 when 9/11 happened and spent most of the early 2000's reading about lizard people, the Illuminati and the bilderberg group. I'm ashamed to admit it, but once upon a time I was a daily reader of Alex Jones.
There are conspiracies. They exist. But I'm mostly speaking to the mindset of a person who completely immerses themselves in conspiracy theory as a way of life.
I also used to be one of them, until I formed the meta-conspiracy-theory.
What if conspiracy theory sites and groups are just part of a conspiracy that exists to monitor, marginalize, and distract conspiracy theorists? What if the only thing that gives the conspiracy any power at all is the weight of the conspiracy theories behind it?
And that's when I spackled over the cracks in my pot, stopped looking for evidence of malicious intent in everything, and washed my hands of all of it.
I still think that there is a massive international conspiracy of rich and powerful individuals, but I also believe that they don't have nearly as much control as anyone thinks they have, including themselves. They have the illusion of control.
For instance, they can propel lobbying efforts to pass trade deals which would "normalize" copyright in 20+ different countries, and then everyone just ignores it and torrents the latest episode of Game of Thrones anyway. They can buy up all the newspapers, and then everyone suddenly stops reading them, so they all have to merge or go bankrupt. They lobby for strict environmental controls, to preserve their huge tracts of land. People subtly cheat or blatantly and overtly break the law whenever the cops aren't watching. Or the vendors cheat on behalf of their customers, just to stay in business. They can manipulate currencies and equities and get even richer, but a hired cook will still piss in their morning coffee or feed them a slice of doodoo pie.
The conspiracy theorists may actually be supporting them, by ascribing to them powers and abilities that they do not actually possess. When the elites gather in Davos, they aren't plotting the future course of the world economy, like everyone thinks. They're patting themselves on the back, getting drunk, doing drugs, and cheating on their spouses in posh hotel rooms, all the while toasting the fact that the proles hadn't erected the guillotines since the last meeting. They remind themselves how important they are, and then return to the world that will briefly roll its eyes at them before getting back to the work it was already doing.
> They can manipulate currencies and equities and get even richer, but a hired cook will still piss in their morning coffee or feed them a slice of doodoo pie.
All the upvotes for this right here LOL. But seriously, your comment reads like it came out of my own head. The elites _try_ to control everything but their efforts are like sticking a rocket onto an asteroid: you can influence its direction but you can't make it do a u-turn. If people want to burn this shit down, they will and there's precious little all that money and power could do to stop it.
The world is scary and unpredictable so people have been comforting themselves with predictions and models since time immemorial; even if those predictions are of their own doom, at least _they_ saw it coming and that makes them feel better/safer.
That's the weird thing about conspiracy theorists. There certainly are big historic coverups; here in the UK we're dealing with finally having an inquest that acknowledges the truth about Hillsborough, for example. But they form a tiny part of the conspiracist worldview.
So what? That's not analysis, it's numerology. Just because some things are true doesn't mean all theories are equally deserving of dignity. But the notion that the USG was monitoring the Internet was entirely deserving of dignity:
* It's their job
* The software security industry is full of people who used to hack professionally for them
* There'd been a major news story roughly every other year since the 1990s Echelon thing about NSA dragnet surveillance
There are still things people say about NSA that have the tenor of conspiracy theories --- some of them being things Snowden actually said! --- and you might be able to make observations about the character of the people who believe those things (I don't know, that was the other commenter's point).
But the basic outline of what NSA is doing with the Internet is not a conspiracy theory.
Another important point-- once you get into the conspiracy theory mindset, it's not so much that a conspiracy or some conspiracies happen. There's a tendency to believe that all conspiracies are true, even the contradictory ones.
Your average conspiracy theorist doesn't just believe the NSA is spying on Americans [they better be spying on non-Americans; we taxpayers are paying them a lot of money to do so] or that Putin has had a few guys killed. Your average conspiracy theorist believes that the Moon landing was faked, JFK was assassinated by a coordinated effort of at least three different groups, there are cures to cancer and all other diseases being kept secret by corporations and/or the gov'ment, Hitler is still alive, aliens have visited the Earth, are living here, and have secret treaties with various states, the UN has real power, various diseases [eg, HIV] are man-made, and various biblical artifacts have been found and kept secret.
You rarely find a conspiracy theorist who believes one crazy thing, it's almost all or nothing. It's this weird credulity veiled as skepticism for the establishment
> You rarely find a conspiracy theorist who believes one crazy thing, it's almost all or nothing
Not sure how true this is. There are certainly a lot of vocal conspiracy theorists online who match your description. Unfortunately these are lumped together to discredit genuine conspiracy theories ( market manipulation, Hillsborough etc ) when they exist. It is a powerful tool to diminish investigation.
>Unfortunately these are lumped together to discredit genuine conspiracy theories ( market manipulation, Hillsborough etc ) when they exist. It is a powerful tool to diminish investigation.
You make it seem as if this association between "rational" and "irrational" conspiracy theorists is itself a conspiracy to discredit the former with the latter, which probably happens, but it's also the case that the conspiracy theorist community (or communities) and conspiracy sites often choose not to discriminate between rational and irrational theory themselves. Conspiracists tend to interpret skepticism or attempts to debunk (read, actually prove) their theories as attempts to "silence the truth," making it difficult to clean house.
Although it also doesn't help that the more outlandish conspiracy theories are the ones that enter public consciousness through the media. But those outlandish conspiracy theories are also the most fun - would anyone watch an X Files about normal, boring conspiracies - tax evasion, surveillance and occasional human experimentation, rather than aliens and the Illuminati?
You seem to be making a lot of assumptions about what people believe. Do you have any evidence to show that people believe all or nothing? Over 80% of Americans think that the official 9/11 story is bunk, are you suggesting that all of those people also believe aliens have visited Earth?
>Such examples, along with others in my years on the conspiracy beat, are emblematic of a trend I have detected that people who believe in one such theory tend to believe in many other equally improbable and often contradictory cabals. This observation has recently been confirmed empirically by University of Kent psychologists Michael J. Wood, Karen M. Douglas and Robbie M. Sutton in a paper entitled “Dead and Alive: Beliefs in Contradictory Conspiracy Theories,” published in the journal Social Psychological and Personality Science this past January. The authors begin by defining a conspiracy theory as “a proposed plot by powerful people or organizations working together in secret to accomplish some (usually sinister) goal” that is “notoriously resistant to falsification … with new layers of conspiracy being added to rationalize each new piece of disconfirming evidence.” Once you believe that “one massive, sinister conspiracy could be successfully executed in near-perfect secrecy, [it] suggests that many such plots are possible.” With this cabalistic paradigm in place, conspiracies can become “the default explanation for any given event—a unitary, closed-off worldview in which beliefs come together in a mutually supportive network known as a monological belief system.”
>This monological belief system explains the significant correlations between different conspiracy theories in the study. For example, “a belief that a rogue cell of MI6 was responsible for [Princess] Diana's death was correlated with belief in theories that HIV was created in a laboratory … that the moon landing was a hoax … and that governments are covering up the existence of aliens.” The effect continues even when the conspiracies contradict one another: the more participants believed that Diana faked her own death, the more they believed that she was murdered.
This is basically the no true Scotsmann argument. Things that I believe in aren't conspiracy theories, because I don't believe in conspiracy theories, I'm just better informed.
In any case, maybe we're a bit off point here, but what ZH posts is definitely closer to "NSA is spying on everybody" than to "lizards run the world" or "moon landing never happened".
One can never know the true story of anything based on what you read, but one can perhaps find some truths from the meta.
Before Snowden, there was about 10 years of news regarding the NSA desiring to spy on everyone (coming from such organizations as the EFF, which -- while clearly biased, are usually not pie in the sky fanciful.)
I'm not too familiar with Zero Hedge, personally. My "first impression" (just looking at Zero Hedge) is that it's not your ultra-conspiracy-theory Alex Jones type site. Definitely no Jade Helm 15s or Illuminati here.
However, I do think that the tone of the site is excessively negative and excessively Chicken Little. It also hawks gold in a bad way. Very much a red flag. In the real world, gold tends to be a more emotion driven trade than a logical one -- http://www.economist.com/news/finance-and-economics/21692942... .
The best time to buy gold is actually during times of good prosperity, when the fearmongers stop pushing up the value. :)
I think many of the subjects Zero Hedge reports on look like real issues, to be honest. ZH doesn't seem to have any solutions other than "OMG world going to end buy gold!". Which is... not helpful (see above). There's too much of the "Evil Elite Wall Street / Politician" angle as well; while we should be concerned about inequality, concentration of capital in markets, etc., casting them in emotional terms isn't helpful either.
That's my first impression. Maybe I'm wrong, I'd love to hear a counterpoint. From a perspective of where I get my "truths" from, personally I get most of my business news from The Economist and Kiplinger. Even then, this is not really for investment purposes. The best investment advice is relatively simple: invest periodically in a variety of baskets, and hold long.
I got curious so I went to the site to take a look. I'd put them in the same vein as survivalists, people who take such excessive interest and pleasure in knowing "how the real world works," that they miss the bigger picture. Not aggressively wrong about everything, but you can safely ignore them because their motivations get in the way of real truth.
I would say "secretly theist" rather than "secretly authoritarian". I can see a strong parallel between conspiracist and theist beliefs, in that the mundane world is an illusion, lie or trap beyond which a metaphysical world exists full of hidden truths and malevolent beings who conspire to control everything behind the scenes, of which most people are completely unaware. Conspiracy theorists merely replace a supernatural demiurge with a political one.
I think one of the compelling aspects of conspiracy theory as an expression of faith, is that it's comforting to realize that even if the world is run by a dark and malevolent agenda, at least it has an agenda, and someone or something is in control.
One can see this expression of conspiracy as religion here on Hacker News. Whenever a skeptical statement is made about some conspiracy theory, someone will inevitably state that because Edward Snowden was proven right, conspiracy X should be considered true. Or, because people considered the things Edward Snowden described were once considered "conspiracy theory", one should accept that conspiracy theorists are enlightened about the true nature of the world.
Rationally, this argument makes little sense as one conspiracy theory being true doesn't validate the truth of another, but such statements are made in the context of religion all the time, as expressions of faith.
I don't know why you make that claim except that, once you did, many other posts on this forum followed suit. In all honesty your claim (that zerohedge is a conspiracy site) and the ensuing posts looks more like conspiracy (blog-spamming or blog-misdirection) than does zerohedge.
zerohedge WAS once a decent current economics site that sometimes featured excellent articles but the responses of members began to decay. Today the responses are mostly noise and I rarely bother to visit zerohedge.
I disagree. I don't have an interest in digging through ZH posts to prove my point, but in general the spin of the site is conspiratorial in nature.
Whether it's the Fed is in it with the banks to provide free money to prop up the market, or the BLS number are not to be believed or trusted, or any other number of reoccurring themes, ZH is a conspiracy site.
The Fed, by it's own admission, saved the world from financial Armageddon during the last crisis by acting as a lender of last resort to many a large financial institutions. They also had private meetings with banks to try and stabilize the markets.
Whether they went too far with their monetary policy is something that we will only find out with time, but there is nothing conspiratorial here.
Not conspiratorial, but the government picking winners and losers is certainly ripe for abuse. The government's job is certainly not to use taxpayer's money to support businesses who made poor decisions (started with LTCM' bailout in 1997). The justification is always one of "saving the financial system from collapse", yet nothing was done since 2008 to break up the "too big to fail" entities.
BLS numbers are routinely revised in retrospect to be worse a quarter or two later and with a friday release so that no one notices. As in, more than one in two BLS unemployment reports is retroactively revised, and I don't remember a single "it's actually better than we previously reported" revision.
tptacek (IIRC quoting someone else) described it well: ZeroHedge is the conspiracy theory site without the conspiracies. Ignore the tone, take the analysis with a lot of salt, but do look at the data - they bring to the front a lot of data that no mainstream publication will show.
There are two things wrong with the common view of conspiracies:
1. That it is impossible or at least, extremely unlikely, for a group of people to meet in private and make plans to further their own agenda at the expense of others -- that's all a "conspiracy" is. It happens thousands of times per day at any scale of operations.
2. That you actually need conspirators for a conspiracy-equivalent effect to take hold. Do you remember the option backdating scandal? Turns out tens of companies did the same thing. Hundreds involved was aware, no one talked, until an outsider forced the SEC to respond. This doesn't need to be centrally orchestrated. Whether or not you consider this "a conspiracy" or not, doesn't matter. It was effectively a conspiracy against shareholders. Similarly, there's the still unfolding emission scandal which is (effectively) yet another large scale conspiracy, whether or not Mitsubishi and Volkswagen engineers met in a shady bar to co-ordinate their cheating or not.
> BLS numbers are routinely revised in retrospect to be worse a quarter or two later and with a friday release so that no one notices.
See.. this is where you're completely wrong.
> As in, more than one in two BLS unemployment reports is retroactively revised, and I don't remember a single "it's actually better than we previously reported" revision.
All BLS reports are revised -- they're surveys that are aggregated as firms respond. Their methodology is completely transparent.[1]
In fact, the BLS is so transparent that they actually keep a data series that tracks revisions to their own data with monthly history back to 1979! [2]
Their initial monthly jobs numbers in 2015 were overstated by an average of 4,000 jobs. However, in 2014, their initial jobs numbers were understated by 37,000 jobs. Does understating the initial numbers by nearly 40,000 jobs/month sound like the behavior of an agency trying to fool the public?
Conspiracy theories about public entities that report every single facet of their methodology, data, and metadata are silly.
> BLS numbers are routinely revised in retrospect to be worse a quarter or two later and with a friday release so that no one notices. As in, more than one in two BLS unemployment reports is retroactively revised, and I don't remember a single "it's actually better than we previously reported" revision.
That's how it is supposed to work, they do the best with the data they have and then update as more data comes in. They are trying to gauge hard to measure things using samples, it's a tricky business.
As for revising to the upside, it happens all the time. December and January were both revised upwards:
> The change in total nonfarm payroll employment for December was revised
from +262,000 to +271,000, and the change for January was revised from
+151,000 to +172,000. With these revisions, employment gains in December
and January combined were 30,000 more than previously reported.
You get downvoted, but IMO you make a good point. There's a lot of things on ZH that are far-fetched, many articles by guest writers that are clearly in the 'conspiracy theory' corner, but if you use your brain to filter out the noise, there's a lot of truth to be found on ZH that most other media outlets don't want to report on (for whatever reason).
It's not just HN commenters who are typically poorly educated about finance, almost nobody thinks any more about these things than what they get from the mainstream media.
Years later, after things have crashed and burned and many of the 'conspiracy theories' that had been on ZH years before they turned out to be (at least partially) true, those same people flock to movies like 'The Big Short' in large numbers, and the talk of town is 'how nobody could have seen this coming'... :-/
> I recall HN saying gold market manipulation was conspiracy theory (...)
This is a pretty good example actually. ZH covered the gold/silver/libor market manipulation in pretty good detail. They also explained a lot about the insides of these deals, I frankly had no clue about. They did a pretty good job on thios one. However, this is not a conradiction to what [parent] said. Consipiracy theories do attract an authoritarian leaning mindset, he is right.
Also, on a sidenote: There are conspiracy theories that have some credibility, some of them even became true in the past (NSA, P2, at some point even the existence of the Mafia was one). Conspiracy theories become problematic, when they become an ideology. When you explain everyone and everything in the context of a conspiracy, you run in a one-way filter-bubble, because everything supports the theory, especially facts, that contradict them.
I'm with you as far as the level of finance knowledge on these boards. It's not surprising coming from a world where actually making money in your business is an afterthought.
That said, regarding ZH and "gold manipulation": what's exhausting is their claim of the magnitude of the effects, as if precious metals prices would suddenly fly through the roof. For example, when some of the big silver banks were busted for price fixing--a story that ZH covered extensively-- what happened? No visible effect on silver prices. So, the conclusion drawn is that there must a bigger conspiracy.
I'm with some of the other commenters here. ZH is on the bleeding edge of financial news, but you have to untangle it from the hyperventilating. And the comment section is a cesspool.
One shouldn't expect HN commenters to be well educated in the fields of economics and finance.
They are, after all, complex fields that take degrees and years of study and this is largely a tech forum. You don't see economists jumping onto stack overflow and yelling about how wrong this or that piece of code is, but somehow the reverse occurs with mind-boggling frequency.
I did stop reading any financial website years ago. It seems that I missed this story about the (proof of the) gold market manipulation and i followed this thema for years. Can you give me a link for this, my google foo doesn't work.
Rule #1 do not complain about down-votes, if you mind too much about them you will get gun-shy or putting filter. I have enough down votes but it still stings a bit, once past the initial sting, you will realize that people are politically and ideologically vested, irrespective of left or right, they will piss on your parade if you shake their world view and honestly, I may be one of them.
Say what you want to say respectfully and do not worry about votes.
This is a common trend among more ardent libertarians. I think it's due to a lot of libertarian predictions about the post-recession stimulus not coming true.
I know, I was one of those libertarians who though Obama was going to usher in a period of high inflation-driven growth. I was completely, absolutely, and astoundingly wrong.
My response was to update my beliefs, but some people's response to their theories being proven incorrect by reality is to become rigidly authoritarian.
"If reality doesn't conform to my worldview, I will make it conform!"
Remember the Communists, like modern libertarians, originally had a stateless society as their goal.
I think this is what happened with ZH and many other libertarian leaning sites.
In a world of centralized media, the incentives led outlets to promote viewpoints supported by the elite and omit viewpoints that would offend them. Their access to viewers, leads and advertising dollars required the party line product we all recognize.
In a world of decentralized media, you can't get readers to keep coming back if you're just another mainstream news source. Instead, you have to choose a niche viewpoint and convince readers that your outlet is the only place they can get information about it. This results in a competition between niche news outlets to present as extreme a viewpoint as their readers will tolerate, or create new viewpoints that can attract an audience.
The world is being radicalized by capital. Dividing us is profitable.
The simpler, less sinister explanation, is that normal moderate viewpoints do not pay the bills, but extreme and sensational viewpoints -- whatever the flavor -- do.
They post things like this all the time. I would take it not as them editorially advocating the position, but rather getting information otherwise censored by other media out there. Sometimes the information is not reported for good reason, such as this. You need a very good BS and relevancy filter to find the few nuggets of gold that are put out maybe a few times a year by ZH.
An "even a broken clock is right twice a day" method of viewing a content publication is a funny way of explaining away dangerous "journalism" for a couple of stuck clock hands.
I prefer to think of it as clock hands that move in a specific direction, one that is mostly uncorrelated with the direction everyone else's clock hands move, but sometimes it reaches the destination everyone else arrives at first, sometimes it is just trolling you.
> Some very, very powerful and influential people are terrified of it and are doing everything they can to make sure it never sees the light of day. Which makes me infinitely more curious.
Which is quite solid logic - why would "they" want to ban something unless they're afraid of it?
Maybe they're afraid of it because it's genuinely misleading and dangerous to public health?
Just because innocent people are sometimes harassed by the authorities does not mean you can use harrasment by authorities as evidence that someone's actually in the right.
My thoughts exactly. I was a daily reader of ZH going back to its very beginning. The tone of it's articles and comments became unbearable ~2011 so now I only go there a couple times a year out of nostalgia.
I was IP banned from that site around 2011 because I left a comment saying that if you did what the site was preaching in the previous two years (2009-2011), meaning shorting the market because the second collapse is just around the corner, you would have lost a ton of money.
I think what you are noticing is a broader shift in the libertarian community: people are noticing that an open libertarian society isn't possible since most people aren't libertarians but would like the material benefits that more libertarianish societies offer.
Many libertarians I know are now "nationalist libertarians", opposed to large scale immigration, increasingly skeptical of international free trade, and so on. A lot of ex-Ron Paul types are now Trump supporters.
To me, this seems like the political/intellectual story of our time. It isn't happening in the mainstream media, of course, because libertarianism has never had the high ground there: you see it in the blogs and, of course, in the chans & reddit.
> About 2 years ago the tenor of the publications shifted from libertarian to more and more reactionary (bordering on proto-fascist). When I skip the articles nowdays, I think that the authors have no problem with authoritarianism, as long as taxes are reduced and social welfare is gutted (it is obviously not stated as such, but most opinion-pieces speak for themself).
I think the problem with this is their ideological goals are to starve the beast and play at being antiestablishment. They were always unscrupulous about the how and have been since at least 2011 when I first noticed they existed.
I honestly don't think the tone has changed substantially.
Important context to see both sides, certainly a questionable liability they knew about, I guess he worked so hard they felt it was a risk worth taking, which brings their judgement into question.
The fact that all this drama is being publicly aired and used as a weapon does not put Zero Hedge in a good light, it's almost like Bloomberg baited them into this defensive posture.
> Regarding, the actual content of Bloomberg's platform giving voice to a disturbed individual, former drug dealer and alcoholic, we find it particularly amusing as it "accuse" Zero Hedge of being intent on generating profits.
> Coming from Bloomberg we find this not only entertaining but somewhat hypocritical.
> Incidentally, the chart above may explain why none other than our "competitor" Bloomberg decided it was its mission to voice a grievance of a disgruntled former employee who admitted it was his intention to "destroy" Zero Hedge.
They show their web traffic towards the end which seems to point to 1.5-2mm daily users. I don't really have too much context for such numbers. But it seems like it was enough to pay their disgruntled writer $100k+ per year.
Believe it or not it has a huge following in the finance world due to it often being one of the first ones to break or provide color on important stories.
It's not uncommon at all to see a row of traders with tweet deck open allocating a single column to Zero hedge, they are just that prolific with their output.
The downside of the site is that they tend to have a very big bearish slant though. No one has ever accused them of being neutral.
I hope they continue to run the site. I find it provides a fair bit of value to me.
Regarding the "huge following"... Yes, lots of people read it, send links to friends, etc. But, most of the time those links are sent for comedy or shock value, not because people think it's serious news. To use an analogy, zerohedge is like the 4chan of the finance world.
If there is shock value, it is because ZH focuses on facts (yes, they are usually well documented facts), which the so called mainstream media chooses to ignore, because the narrative does not suit their corporate owners.
Most of ZH's reporting is backed by numbers coming from other sources. They also report rumors ahead of everyone else, which seem implausible, but later turn out to be facts and reported by other outlets.
Yes, they have topic selection bias, but so does everyone else.
Seriously, they do. They spin them in weird ways, though - I remember in 2007 (or early 2008), they had an article about "the bin laden trade" - someone bet $30M or so on a very improbably collapse -- Or so the article inferred based on highly irregular "put" purchase -- losing $30M if that didn't happen, or winning billions if it did.
The data was, in fact, factual. However, they failed to account for alternative explanations, e.g. that someone (probably a pension fund or a hedge fund) was moving a lot of money into the market, and was buying insurance -- a much more likely explanation for the same data.
They do stick to facts. It's their analysis that you should reserve your skepticism to.
1. The government releases a report with an important indicator looking good
2. Mainstream Media cheers, telling us how good we have it
3. ZH looks at the report and notices that:
- the number was "seasonally adjusted" once, then again
- the number will be revised down, a month later usually on a late Friday at happy hour
- pesky details: employment growth is in part-time, minimum-wage jobs
ZH often reports facts from official government reports/documents - they are typically buried on page 99 out of 100 (for a reason).
Some people may choose to call the above rumors or "sensationalism" - feel free to ignore ZH, it is a free country.
Fyi: john Crudele reports on employment at the nypost ; he gets inside info from census (which he blasts)
Years ago he reported on plunge protection team(ppt- market manipulation) that i was skeptical about. I no longer am.
In my experience, for a while when oil was extremely volatile up over $100 per barrel, they were at the forefront of breaking any supply chain stories (ex: Suez Canal). I survey many different sites and I have seen ZH do some very timely and organized reporting. Also, they aggregate a lot of big names (Gross, Gundlach, etc) so I don't have to track down their latest missives. There is a very long and seemingly unending row of garbage barge stories and sensationalism to deal with though, I will never deny that.
I can't speak to the "important" in that claim, but the folks at ZH have friends and connections in the world of finance from whom they can get leaked communications and reports.
For example, this post on Trump's nomination chances [1] draws heavily upon charts produced by Goldman Sachs, presumably for their clients only.
Edited to add: I also know this because a friend of mine had their report leaked and written about on ZH, leading to a bit of a storm in a teacup at their workplace.
That is also not an break on an important story. Just some analysis again.
But yes, those leaked reports on ZH are interesting. Problem is they also publish lots of stuff from disputable sources. At the end you don't know what to take serious on this website, which results in an entropy of about zero.
In 2009, when WHO upgraded the bird-flu scare to a "pandemic level 6", I heard the news first on the ZH Twitter. Only one-two hours later did the usual agencies also reported this (probably because they were verifying it).
That is not a break on an import story. It would have been if they would have posted this before Moody downgraded Zohars.
This is nothing else then some collections of freely available news mixed together with some pubertal slang.
And their included predictions have a bad hit rate, even for ZH standards.
You're right, it's not breaking news. I misread your quote. Nonetheless, it was a decently done, freely available analysis done on a semi-esoteric topic that really would not be covered by anyone else. If you solely rely on any source for "predictions", let alone ZH, I don't know what to say. No one is ever going to claim that ZH made them rich.
Zerohedge is one of the most remarkable web sites today. I started reading it after 2009 and today it's (along with HN) my daily read.
For me as a Westerner there are few places where I can read non-mainstream opinions on things like the war in Syria, the oil price and currency wars, the daily SNAFU in the financial worldlike Negative Interest Rate Policy (NIRP).
To be sure, the headlines are often sensationalist but the content often exceeds whatever analysis you can get to read from mainstream media (= the big online newspapers in the US, and Europe).
That is astonishing. If you remove the usual conspiracy theories and the right wing populism crap there is not much more left than you can read on bloomberg or any other financial news site.
That's completely untrue. Zero Hedge breaks news before a lot of outlets and writes on a lot of market events that other sources will not touch. I'm not disagreeing that you need to have a filter when reading but they absolutely do provide value.
Gold price spikes down, it's the HFT slamming it because they work for the Central Banks. Gold price spikes up, it's because investors are concerned about the market.
Stocks spike up, it's the HFT again. Stocks spike down - investors start seeing that the whole market is a scam.
So the HFT trade only in the "wrong" direction according to ZH. They sell gold and buy stocks. Never the other way around. I'm exaggerating, but only a bit, there were a few articles which blamed HFT for "right" moves (gold up, stocks down).
Everyone I've talked to that works in HFT --- and that's a bunch, because we built a trading CTF --- sums Zero Hedge up the same way 'yummyfajitas (also a former HFT) does: "a conspiracy theory site without the theories".
From their response article: "We are ok with being typecast as "conspiracy theorists" as these "theories" tend to become "conspiracy fact" months to years later. "
On the one hand, they can produce some really amazing and compelling content, whether its their own analysis or an analysis of an article from somewhere else on the web. A recent article of memory: http://www.zerohedge.com/news/2016-01-17/what-just-happened-....
But over the years the site's tone has changed. While they are still dedicated to financial news and insights, they post a lot of survivalist non-sense and it feels more like a far Right wing blog now, advocating you to buy gold in one article that sits below another highlighting proof that the gold market is fixed. I can support a position of reporting on everything and anything, but these inconsistencies and the fact that there is a dearth of articles with viewpoints and analysis from the Left has led me to question their true motives now. They'll also censor you for trying to bring this up in their comments section. A few years ago my account was banned after I called them out for putting up an article stating how some Goldman report was BS, while simultaneously they had up a blog post that used stats from a different Goldman report.
I still visit the site everyday. They still occasionally break some headline stories and you still find some really great articles. But generally it's become an insufferable website.
A for profit news editorial site based on sensationalism. Why is anyone surprised? That's "news" today. Just turn on the television in the US. I haven't been able to watch CNN since the mid-90's.
You should. You should also take it for what it is, infotainment. I find reading an extreme viewpoint can be very informative after the alternative extreme is considered and skeptical comparisons are made. Finding the biases becomes easier, determining who is being more disingenuous is still tough. I must also be able to recognize & account for my bias/interest in the topic, as well.
Back on topic: I know corruption can exist in any institution and lobbyists with the biggest bag of donations tend to win the laws that make their spurious practices 'legal', but I'm quite satisfied the majority of ZH's predictions haven't come to fruition. There is no solace in large-scale failure of any systems. One thing is for sure, when one does happen, you can bet a large number of ZH commentors will invoke "I told you so!".
I think whether you like the site or not depends mostly on if you think there was a fundamental recovery after 2008 or just an asset bubble generated by extremely easy monetary policy around the world.
This site has long been a bewildering mishmash of doomsaying and cassandra-like apocalyptic predictions - but the other shoe has simply never dropped. During the days when the financial crisis was hot and fresh this brand of naysaying seemed really insightful and prescient - but, in retrospect, it was just something of a firehose of "short the system."
That a lot of analysts read it doesn't make it credible. A lot of politicos read infowars too - it doesn't mean it isn't mostly hyped up garbage.
Far too many of their headlines are too sensationalist and make too many testable claims and predictions - they are chicken little, and the sky simply hasn't fallen.
yep, the crisis made asshats like Peter Schiff seem like smart guys. Lots of doomdayers created awesome careers because the world legitimately did appear to be falling apart. The irony is, if anyone had listened to the ZH's and the Schiffs of the world, it actually would've fallen apart.
The huge pro Russia bias just became unbearable after a while. Whatever Putin does is consider awesome, whatever Obama does is considered bad. China coverage seemed somewhat more balanced.
With some reluctance, I follow ZH on Twitter. Like other sites like Russian Times, Haretz, Al Jazera, it is good to be skeptical, but it is also good to break out of the hold that mainstream media has. In the USA, the "news" is so bad that I honestly believe that I get more information from random reading, just a few minutes a day, of sources from many countries on the web than the network "news."
I travel a fair amount, and it seems like people in other countries don't have an obsession with "news" that so many of my acquaintances in the USA have. I think that one hour a week is about the maximum amount of time anyone should spend on the news - better to spend the time engaging in business, family and friend time, write a book, volunteer with a charity, community involvement, etc.
I love the potential conflict of interest statement in the article: "Bloomberg LP competes with Zero Hedge in providing financial news and information."
It's funny that one of the largest flag theory sites, sovereign man, refers to zerohedge almost exclusively for political and financial theories. I thought they were actually run by the same person(s) for a time.
When I came across zerohedge about 2 years ago, it looked like they were bearish all the time, and right less than half the time. I think people see what's right and don't pay attention to when it's wrong.
Was an interesting site in the beginning, but got stupider and stupider. My guess based on this article is that it's a 419-style strategy; stupid people don't use adblockers as much.
Avid ZH reader since before it had its own domain -- this list is incomplete. There are several bloggers who have posted links to their work under the name durden.
I stopped reading the site several years back. It has too much of a end of the world doom and gloom view. Yes it does provide a different view against what you see in the mainstream news. You tend to get sucked into this worldview it presents, and you end up getting very little done on your side projects.
I mean, I think it would have been fine not to include a disclaimer at all; you'd have to be an idiot not to realize that. But what is wrong with this one? Or do you just want them to pretend nobody else exists?
Well, it's fair to take issue with the idea that ZH provides any information whatsoever, but I get the feeling that that's not what the parent commenter is upset about.
Like many here, I've read ZeroHedge for a few years. I loosely agree with the analysis that the tone has become "conspiratorial," but this argument fails to disambiguate between a "conspiratorial" tone and the intentionally provocative rhetoric of the ZeroHedge authors. They KNOW their content falls under all those labels so derisively ascribed to it, because that is their intention.
My reading of the [conspiratorial|far-fetched|proto-facist] content on ZeroHedge is that it's not meant to be literal, but a veneer of SHOCK VALUE that serves two purposes. First, it gets readership due to classic clickbait psychology. Second, its mere existence demonstrably proves ZeroHedge is an "alternative" media site undiluted by editorial filters. This distinguishes it from every mainstream media publication, and that alone makes it worth reading (provided you can find some signal worth your time).
The shock value signals to astute readers that ZeroHedge is not a traditional site, and that yes, you SHOULD take everything they say with a grain of salt. But the logical jump from "you should take it with a grain of salt" to "you should ignore it" misses the simple fact that its writers INTEND for the content to be provocative. They WANT you to take it with a grain of salt.
Taking things "with a grain of salt" is GOOD for you. It means you are THINKING CRITICALLY. People should be taking everything with a grain of salt. What alarms me most about ZeroHedge is not its content, but the attempted ostracizing of that content by other publications, as if the shock value justifies ignoring it all together. Incidentally, this is the same smear tactic that mainstream media sites are applying to Donald Trump: he says <thing> we find offensive, therefore <every other thing> he says must be invalid. If we applied this logic to all information, there would be no difference of opinion in the world.
To paraphrase Christopher Hitchens, the person yelling "fire" might be the one worth listening to, and we should always question our own beliefs and fear consensus. To quote him directly, they [0] were "the ones shouting fire when there really was a fire in a very crowded theatre indeed... [W]ho’s going to decide?" [1] [2]
[0] "They" were the socialist party of philadelphia, who opposed the draft of WWI, "on the grounds that military conscription constituted involuntary servitude, which is prohibited by the Thirteenth Amendment.": https://en.wikipedia.org/wiki/Schenck_v._United_States
> (Bloomberg LP competes with Zero Hedge in providing financial news and information.)
Does anyone else feel this is particularly generous?
ZeroHedge is borderline conspiracy theorist nonsense surrounded by occasionally correct financial analysis with a level of accuracy on par with a dart board.
ZH may be early and there may be some separation of the wheat from the chaff that one must do, but their general bearish theme resonates as true based on the data.
The BLS numbers are phony. They monkey around with the denominator, so drop-outs from the workforce are not counted. They also count one person losing a good full-time job but gaining multiple part-time jobs as a net positive. Never mind those numbers---all you need to know is that the adult labor force participation rate is at its lowest in about 4 decades.[0] The ratio of average income to home prices is about twice that of the 50s/60s (over 3.3) Also, if unemployment were measured as it was decades earlier, the unemployment number would be much higher. Outside of tech, where tons of money has flowed thanks to the Fed's helicopter money and investors seeking higher returns (as interest rates are ~0), the economy has been doing lousy. Yet all we're told via mainstream sources is that the Fed and Obama saved the day and shutup about it already!
As others have noted, this expansion is long-in-the-tooth, at least by historical standards. Companies' inventories are up, which also signals an economic slowdown in the works. After QE1, QE2, QE3, and bond buying totaling $4 trillion (!) of expansion of the monetary supply, we've had a paltry sub-3% GDP growth (0.5% in the first quarter of this year!). A former Fed board member admitted recently that they "front-loaded" the recovery; indeed, it should be noted that this "recovery" is almost a direct result of the Fed's actions regarding monetary expansion. This also explains the fantastic increase in asset values (classic cars, houses, art, stocks, etc.)
The Fed is a private cartel. It is the third central bank in the history of the U.S., and was created so the banks would no longer be forced to compete with each other. It is not independent of politics (far from it)---for example, Yellen knows she should raise interest rates, but knows that the Democrats will be thrown out of office if she does before 2016 (see the minuscule 25 basis-point increase that caused huge market turmoil late last year), and a Republican would throw her out the day he was sworn in. Even if you don't believe the "conspiracy", the fact of the matter is that central planning is disastrous, and it is especially disastrous when it comes to the price of currency (i.e., interest rates), as that affects everything else in an advanced economy (especially long-term capital investments).
ZH has done a good job keeping us apprised of these developments. They operate under the assumption that the current fiat currently standard cannot survive, and they are right. Of course the timing is virtually impossible, but I (like them) predict a bad recession in the next year or two. Over the longer term, the system will inevitably collapse.
Here is what ZH is good for: they have stuff before anyone else, because they'll print almost anything. For instance, after San Bernardino those guys had details way before other outlets, because they're willing to go to press with just "some guy overheard this on the police scanner and tweeted it".
So when you read ZH you see stuff first, but you place a big mental asterisk by it until their scoop trickles up the media food chain and starts to get confirmed as real reporters do actual work on it.
I like seeing stuff first, before everyone else gets it, hence my continued regular reading of ZH (again, I keep a 40lb bag of Morton Salt by my desk with the ZH logo on it, though).