
Unmasking the Men Behind Zero Hedge - minimax
http://www.bloomberg.com/news/articles/2016-04-29/unmasking-the-men-behind-zero-hedge-wall-street-s-renegade-blog
======
jonstokes
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).

~~~
pfarnsworth
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.

~~~
nugget
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.

~~~
jonstokes
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.

~~~
hammock

      We everlasting gods . . . Ah what chilling blows
      we suffer—thanks to our own conflicting wills—
      whenever we show these mortal men some kindness.

------
maze-le
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.

~~~
alistproducer2
>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.

~~~
didjdjjdjf
What's sad is no matter how often people like you are proven wrong you'll just
keep on repeating the same bullshit.

I recall HN saying gold market manipulation was conspiracy theory, ZH was
right HN commenters were wrong.

There's a long list but when it comes to finance HN commenters are typically
poorly educated.

~~~
didjdjjdjf
Typical childish behavior, down vote criticism, ignore the facts.

~~~
sremani
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.

------
MajesticHobo
ZH's response: [http://www.zerohedge.com/news/2016-04-29/full-story-
behind-b...](http://www.zerohedge.com/news/2016-04-29/full-story-behind-
bloombergs-attempt-unmask-zero-hedge)

~~~
wyck
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.

------
chollida1
If no one has been to the site before here it is:
[http://www.zerohedge.com/](http://www.zerohedge.com/)

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.

~~~
tobltobs
> first ones to break or provide color on important stories.

No question about the color, but do you have an example for those "break on
important stories".

~~~
shrikant
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.

[1] [http://www.zerohedge.com/news/2016-03-20/can-trump-win-
gener...](http://www.zerohedge.com/news/2016-03-20/can-trump-win-general-
election-goldman-answers-all-your-election-questions)

 _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.

~~~
tobltobs
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.

------
dmichulke
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).

Here is Zerohedge's response to the above article:
[http://www.zerohedge.com/news/2016-04-29/full-story-
behind-b...](http://www.zerohedge.com/news/2016-04-29/full-story-behind-
bloombergs-attempt-unmask-zero-hedge)

~~~
tobltobs
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.

~~~
whatok
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.

~~~
tobltobs
> breaks news before a lot of outlets

Any examples?

~~~
dismal2
All their coverage of hft when nobody was talking about it

~~~
21
The usual coverage of HFT on ZH is like this:

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).

~~~
dismal2
I meant around the time of the flash crash and in them making hft more
mainstream

------
snake_plissken
I have a love hate relationship with Zerohedge.

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-...](http://www.zerohedge.com/news/2016-01-17/what-just-happened-
oil).

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.

~~~
tomp
That aritcle actually has an interesting follow up.

[http://www.zerohedge.com/news/2016-01-21/something-
blowing-o...](http://www.zerohedge.com/news/2016-01-21/something-blowing-oil)

Basically... they were right! (You can cite this as an example of quality
reporting or as an example of cherry-picking research...)

------
apercu
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.

~~~
tomp
The value in ZH is that their sensationalism is pretty much the reverse of
most other mainstream media. "Anti-establishment" as they say.

~~~
apercu
That's fair, I haven't read it.

~~~
tunap
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!".

------
dismal2
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.

Only time will tell who's "right" in the end!

------
alistproducer2
ZH is the infowars of the financial world.

~~~
libertymcateer
Hear hear.

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.

~~~
alistproducer2
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.

------
sireat
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.

------
dboreham
Well...this just succeeded in adding more readership to ZH. Their "anti-
article" to the Bloomberg piece is fascinating reading.

------
kostyk
They published an answer to the article.
[http://www.zerohedge.com/news/2016-04-29/full-story-
behind-b...](http://www.zerohedge.com/news/2016-04-29/full-story-behind-
bloombergs-attempt-unmask-zero-hedge)

------
mark_l_watson
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.

------
Mikeb85
You mean the "the sky is falling so sell everything and buy gold" blog?

Might be good entertainment for wannabe daytraders and inexperienced retails,
but they're almost always wrong about things...

------
andysinclair
I love the potential conflict of interest statement in the article: "Bloomberg
LP competes with Zero Hedge in providing financial news and information."

~~~
RockyMcNuts
The Bloomberg journo who put that in was either chuckling or clenching their
teeth, or both.

------
lowpro
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.

------
pessimizer
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.

------
moon_of_moon
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.

------
bernardlunn
Used to have really ground breaking investigatve journalism in obscure market
structure stuff. Went sensational click bait.

------
tmaly
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.

------
sremani
Here is ZH's article about the unmasking

[http://www.zerohedge.com/news/2016-04-29/full-story-
behind-b...](http://www.zerohedge.com/news/2016-04-29/full-story-behind-
bloombergs-attempt-unmask-zero-hedge)

------
known
[http://www.zerohedge.com/print/502779](http://www.zerohedge.com/print/502779)
is the best from ZH

------
nxzero
>> "Bloomberg LP competes with Zero Hedge in providing financial news and
information."

Translation: "Yes, we're attacking the competition."

_____

Reply-To-Comments-Below:

All editors make choices, and to me, this was the wrong choice.

All this does in validate ZeroHedge is a threat and makes Bloomberg look like
a wannabe thug.

Beyond that, appears ZeroHedge made something of this disclaimer too:
[http://www.zerohedge.com/news/2016-04-29/full-story-
behind-b...](http://www.zerohedge.com/news/2016-04-29/full-story-behind-
bloombergs-attempt-unmask-zero-hedge)

~~~
return0
anything wrong with that?

~~~
ecnal
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.

~~~
nxzero
Creative you are, and you're right, idea that Bloomberg would feel they're a
competitor to ZH is a joke.

------
chatmasta
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](https://en.wikipedia.org/wiki/Schenck_v._United_States)

[1]
[http://www.youtube.com/watch?v=X3Hg-Y7MugU](http://www.youtube.com/watch?v=X3Hg-Y7MugU)
(thanks to HN commenter in another thread for linking to this today)

[2]
[http://documents.ariadacapo.net/borrowed/2006_11_christopher...](http://documents.ariadacapo.net/borrowed/2006_11_christopher_hitchens/christopher_hitchens_2006_11_talk_transcript.pdf)

------
Tycho
15 posts a day of as much as 1500 words? That's kind of... prodigious.

------
fweespee_ch
> (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.

~~~
tanderson92
The point isn't to be generous, it is to disclose to readers possible
conflicts of interest.

------
SovietDissident
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.

[0]
[https://www.bostonglobe.com/business/2015/07/02/percentage-w...](https://www.bostonglobe.com/business/2015/07/02/percentage-
workers-labor-pool-falls-year-low/zfLQrKjCyhra95v8PJxWcI/story.html)

